Bitcoin slipped below $116,000 on Monday, reversing gains from last week’s record rally, as investor sentiment soured on shifting central bank expectations and rising geopolitical tensions.
The world’s largest cryptocurrency was last down 2% at $115,664.5 by 01:58 ET (05:58 GMT). This marks a sharp pullback from last week, when Bitcoin surged to an all-time high above $124,000 before losing momentum.
The latest slide follows hotter-than-expected U.S. producer price data that reignited concerns over inflation, particularly from tariff-related pressures. Those readings dampened the case for more aggressive Federal Reserve easing in September.
Fed Outlook and Political Risks Pressure Crypto
Data released last week showed both the Producer Price Index (PPI) and import prices running hotter than forecasts, prompting traders to temper expectations for a deep rate cut. According to CME FedWatch, markets now largely anticipate a 25-basis-point cut rather than a half-point reduction.
On the geopolitical front, uncertainty increased after the Alaska summit between U.S. President Donald Trump and Russian President Vladimir Putin ended without a deal on Ukraine. Trump shifted his position by backing a comprehensive peace agreement over an immediate ceasefire, a move widely viewed as strengthening Moscow’s leverage.
Investors are now focused on Trump’s upcoming meeting in Washington with Ukrainian President Volodymyr Zelenskiy and European leaders. Whether the talks move toward a settlement or fuel further tensions could influence demand for risk assets such as cryptocurrencies.
Key market drivers:
- Fed policy outlook: Expectations scale back to a 25-basis-point cut.
- Geopolitics: No Ukraine breakthrough; talks resume in Washington.
- Inflation risks: U.S. PPI points to persistent price pressures.
Investors Shift Toward Safe Havens
The risk-off tone in financial markets benefited traditional safe-haven assets. Gold rose 0.7% to $3,357.73 an ounce, reflecting renewed demand from investors seeking stability ahead of the Federal Reserve’s Jackson Hole symposium later this week.
Meanwhile, other digital assets followed Bitcoin lower. Ether retreated further from recent near-record highs, highlighting how sensitive cryptocurrencies remain to macroeconomic shifts and global political developments.
As volatility intensifies, traders are weighing whether Bitcoin’s retreat signals a deeper correction or a temporary pause before another rally. Much depends on Fed Chair Jerome Powell’s comments later this week and the outcome of ongoing geopolitical negotiations.