Crypto News: Why Bitcoin and Ethereum Prices are Falling?

Crypto news shows sharp retreat in the market from its mid‑August peaks. Bitcoin price fell from about $124,000 on August 14 to roughly $108,500 this week.

Ethereum eased from about $5,000 to $4,393. The pullback follows a wave of bad news for risk assets. U.S. inflation data surprised on the upside.

Traders now expect any Federal Reserve rate cuts to be delayed. New reports show US consumer and producer prices rising faster than expected.

According to analyst observations, Trump’s tariffs on imports are starting to bite. At the same time, crypto-focused funds have seen recent outflows.

Together, these macro factors are weighing on cryptocurrency sentiment.

Crypto News: Inflation and Tariff-Driven Price Pressure

U.S. inflation metrics spiked in July. The Producer Price Index (PPI) jumped 0.9% month-on-month in July, the largest gain since June 2022.

Service-sector prices led the increase, adding 1.1% on the month. Broadly, higher wholesale costs suggest businesses are passing on Trump’s import tariffs to consumers.

As one economist put it, the PPI report was “a kick in the teeth” to anyone who thought tariffs wouldn’t hit domestic prices.

Core inflation is also rising – the Fed’s preferred core PCE inflation rate is estimated at 2.9% for July, up from 2.8% in June. In other words, price pressures are proving stickier than expected.

Tariffs have helped push prices higher. Durable goods and basic necessities have seen unusually large price gains.

For example, durable consumer goods recorded their biggest price jump in years after June’s inflation data.

Investors worry these costs will force the Fed to stay on hold. According to reports, a 0.9% jump in PPI was “three times higher than expected.”

This is a bad sign for consumers and a signal that the Fed is unlikely to cut rates soon. That is what pushed the crypto market down.

Most forecasters now expect the Fed to delay rate cuts until clear inflation relief appears, even as the White House pressures it to act.

Fed Policy Outlook and Crypto Market Reaction

Fed officials have turned cautious. Chair Jerome Powell stressed at the Jackson Hole symposium that the labor market is “in a curious balance.”

He noted that even as tariffs are “expected to drive prices higher,” the “baseline case is for [that] impact on inflation to fade.”

New York Fed President John Williams echoed the data‑dependent stance: “Every meeting is … live” for a rate change, he said

Which means, the Fed will await incoming jobs and price reports before cutting rates. In short, officials left room to ease policy only if data softened substantially.

Investors have already pared back some Fed easing bets. After Jackson Hole, markets had assigned about an 85% chance of a September rate cut.

However, hotter inflation and steady payrolls have cooled that outlook. U.S. Treasury yields have risen and equities slid on the data.

The S&P 500 and Nasdaq both dipped as oil‑sensitive PPI figures came in hot.

Crypto markets tend to “trade loosely in line” with technology stocks, so the tech selloff has dragged the crypto market down, too.

ETF Outflows and Investor Mood

Crypto markets’ fund flows have turned negative. On Friday, spot Bitcoin and Ether ETFs saw sizable withdrawals after the Fed released hotter core inflation data.

As per SoSoValue data, Ethereum ETFs had about $164.6 million in net outflows on that day. Bitcoin ETFs lost $126.6 million.

These were the first daily outflows for BTC funds since August 22. The selloff followed a week in which roughly $1.17 billion left U.S. spot Bitcoin ETFs over five days.

For context, those outflows came on the heels of four months of heavy inflows: BTC ETFs had taken in about $18.8 billion between April and July.

The rapid reversal of flows appears to reflect a sudden shift in risk appetite amid the inflation scare. Technicals and sentiment have turned cautious.

Recent weeks of withdrawals knocked Bitcoin roughly 7–8% lower for August, and chart watchers worry key support levels could be tested.

$110,500 is a near-term pivot: a break below it might open a slide toward about $108,000. So far, however, markets remain thin.

Futures open interest has risen even as prices fell, suggesting leveraged “buy-the-dip” trades that could amplify volatility if they unwind.