Bitcoin and Ethereum retreat as inflation fears and tech sell-off weigh

Bitcoin meets resistance

After four consecutive months of gains, where Bitcoin experienced a 66% increase from bottom to top, the cryptocurrency now faces its first monthly loss since March as macroeconomic headwinds begin to take effect.

Cracks began to appear late last week after Bitcoin collided with significant $125,000 monthly trendline resistance, as noted in our earlier article.

The pullback intensified following a strong United States producer price index (PPI) inflation report, which dampened expectations for aggressive Federal Reserve (Fed) rate cuts by the end of the year, impacting risk appetite across cryptocurrency markets.

Tech stocks and crypto correlation

Notably, Bitcoin's peak of $124,517 on 14 August was exactly one month after its previous record high of $123,236 on 14 July.

Bitcoin's retreat has been compounded this week by a sell-off in overvalued technology stocks, which are correlated with Bitcoin and other cryptocurrencies.

This prompted the liquidation of leveraged crypto positions, triggering a wave of selling that drove Bitcoin to an overnight low of $112,580, marking a 9.5% drop from its recent peak of $124,517. This also pushed Ether into a support range of $4100 - $4000.

Future outlook: pivotal factors

Looking ahead, the next moves for Bitcoin and Ethereum will likely depend on risk sentiment, particularly the performance of technology stocks. Remarks from Fed Chair Jerome Powell at the Jackson Hole Symposium will also be significant.

We anticipate that the Fed Chair will remain non-committal and data-dependent, awaiting the following:

• Key payroll data: Friday, 5 September
• Inflation data: Thursday, 11 September 
• Federal Open Market Committee (FOMC) meeting: Wednesday, 17 September 

Bitcoin technical analysis

As shown in the monthly chart, the $124,517 high in mid-August collided with multi-month trendline resistance near $125,000, dating back to the $19,666 high of December 2017.

We highlighted the importance of this monthly resistance at $125,000 in our Bitcoin article three weeks ago.

Bitcoin monthly chart

At today’s low of $112,580, Bitcoin has dropped approximately 9.5% from the $124,517 high recorded last week. After closing below uptrend support on the daily chart at around $116,500, Bitcoin needs to hold above critical medium-term support at $110,000 – $112,000 to avoid a deeper slide towards $100,000.

A sustained break above roughly $125,000 is needed to indicate that the next upward move towards $150,000 is underway.

Bitcoin daily chart

Ethereum technical analysis

Last week, Ethereum's impressive rally ended just $76 short of its $4867 record high of November 2021.

Since that point, Ethereum has fallen 15% to a low of $4062 today, where it found buyers within the $4100 - $4000 support area, coming from the highs of March and December 2024.

Looking forward, it is crucial for Ethereum to maintain above the $4100 - $4000 support region to keep open the possibility of retesting the $4800 - $4870 resistance zone and to avoid a more significant decline towards $3500.

Ethereum weekly chart

• _{Source: TradingView. The figures stated are as of 20 August 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}