Bitcoin experienced a significant price fluctuation, briefly dipping to fill a CME futures gap around $118,335 before attempting a recovery towards the $120,000 support level.

This sharp movement followed an unexpected rise in the Producer Price Index (PPI), which triggered a sell-off across traditional and crypto markets.

PPI Surge Triggers Bitcoin Volatility

The U.S. Bureau of Labor Statistics reported a 0.9% increase in July's PPI, the largest monthly gain since June 2022, and a 3.3% year-over-year rise, exceeding the anticipated 2.5%.

Core PPI also saw a substantial increase. This inflation data led to immediate volatility in the cryptocurrency market, with Bitcoin experiencing a sharp reaction.

CME Gap Closure and Technical Implications

Analysts confirmed that Bitcoin's recent price action briefly filled a CME futures gap located at $118,335.

This closure is seen as the removal of a key technical overhang for the cryptocurrency.

However, Bitcoin has struggled to maintain its rebound, trading below the $120,000 mark amidst ongoing selling pressure.

Market Outlook and Analyst Perspectives

Several analysts have weighed in on Bitcoin's short-term trajectory.

While some had anticipated a move towards $150,000 or new all-time highs if key resistance levels were cleared, others present a more bearish short-term outlook.

Key support levels are identified at $117,500 and $116,000, with potential drops to $110,000 if these levels are breached. Resistance is noted at $124,000 and $121,500-$123,000.

Key Takeaways:

• Bitcoin briefly filled a CME futures gap at $118,335 following a PPI-driven sell-off.
• The unexpected rise in PPI data caused significant market volatility.
• Bitcoin is currently trading below the $120,000 support level.
• Analysts have differing views on the short-term price direction, with key support and resistance levels identified.

Sources:

• Hot PPI Inflation Cools Big Fed Rate-Cut Hopes; S&P 500 Falls
• Bitcoin Fills CME Gap in Recent Crash to $118K
• Rising PPI Report Raises Doubts About Fed's September Rate Cut Chances
• Wholesale inflation much hotter than expected in July — throwing possible wrench into rate cut hopes
• US producer inflation heats up as goods, services prices soar