Bitcoin Shows Wild Price Swings After Setting New Record High

Bitcoin (BTC) had a turbulent trading week, climbing to a fresh record of $124,474 before sharply reversing and settling near $118,800 by Friday afternoon. The swings came after a mix of U.S. inflation reports. Softer numbers early in the week encouraged buying, but later data prompted selling. On-chain figures show more than $1.8 billion in long positions were wiped out during the drop, showing a shift from strong optimism to a more cautious stance.

Mixed Inflation Data Triggers Volatility

BTC reached its peak on Thursday but couldn’t keep the upward momentum. It fell by 4% that same day and was trading around $118,900 the next day. Earlier, the rally had been supported by U.S. Consumer Price Index (CPI) numbers released Tuesday, which came in softer than expected. The data strengthened expectations that the Federal Reserve could cut interest rates in September. U.S. Treasury Secretary Scott Bessent told Fox Business the Fed should even consider a 50-basis-point cut. His comments boosted appetite for risk assets.

However, sentiment turned on Thursday after the Bureau of Labor Statistics reported stronger-than-expected Producer Price Index (PPI) data, hinting at building inflation pressure. This reduced hopes for a big rate cut and pushed investors toward safer assets, pulling BTC below $118,000.

Long Position Liquidations Point to Market Stress

CryptoQuant data shows about $1.89 billion in long positions were closed out when BTC slipped under $118,000. Most of these liquidations affected traders who joined late in the rally. Over an eight-hour period, net liquidations spiked to $130 million, creating a “long squeeze” when falling prices force leveraged long positions to close, driving the price lower.

Institutional Buying Stays Consistent

Despite the price dip, institutional and corporate buyers kept adding BTC. This activity contributed to the earlier rally to record highs. Companies including Strategy, Metaplanet, Smarter Web Company, and Capital B expanded their Bitcoin holdings recently.

Sentora’s Bitcoin Treasury Strategy report shows 213 organizations, including both companies and governments, now hold a combined $228.85 billion worth of BTC. Public companies account for 71.4% of these holdings, private firms for 24.4%, and governments for 4.2%. Holdings have grown from about 1.1 million BTC in 2024 to over 1.77 million BTC by August 2025, showing steady adoption.

SoSoValue data also shows $561.95 million in net inflows from institutions between Monday and Thursday. This is slightly higher than the previous week, though still below the pace seen in mid-July when BTC was near similar highs.

Corporate Moves Boost Long-Term Outlook

Bitcoin-focused firm Nakamoto, led by David Bailey, finalized its merger with healthcare company KindlyMD on Thursday. The merged company aims to build a 1 million BTC treasury. Nakamoto raised $540 million through PIPE financing for BTC purchases and expects to close a $200 million convertible note deal by Friday. Analysts say moves like this support Bitcoin’s long-term case, as more firms choose to keep reserves in BTC.

Hong Kong Introduces Stricter Virtual Asset Rules

The Hong Kong Securities and Futures Commission (SFC) announced new guidelines for virtual asset trading platforms on Friday to improve client asset protection. This follows earlier investigations that found cybersecurity weaknesses at some platforms.

The measures come shortly after Hong Kong introduced new stablecoin regulations this month. The city remains an active hub for crypto, serving as a testing ground for China’s stance on digital assets, which remain banned on the mainland. Market watchers believe these developments could support Bitcoin adoption.

Bitcoin Price Outlook

BTC’s short-term direction will depend on whether it can stay above the $116,000 support. Holding that level could pave the way for another test of $124,474. Technical signals are mixed but lean positive. The daily Relative Strength Index (RSI) sits at 54, showing moderate bullish momentum, while the Moving Average Convergence Divergence (MACD) indicator gave a bullish crossover on Monday.

If BTC closes below $116,000, the next key support is around $111,980.

Ethereum Drops 5% as Validator Exits Surge and Inflation Data Disappoints

Ethereum (ETH) fell 5% on Thursday, pressured by a sharp rise in validator exit requests and higher-than-expected U.S. PPI figures for July.

Data from Beaconcha.in shows Ethereum’s validator exit queue rose to more than 727,000 ETH worth over $3.2 billion on Thursday. Wait time is around twelve days. This came less than a day after ETH nearly hit its all-time high.

The exit queue reflects ETH set to leave validation duties. Once withdrawn, coins can be sold, moved into higher-yield DeFi platforms, or stored in wallets. The amount exiting far exceeds the 277,000 ETH about $1.2 billion currently queued for staking.

Analysts see this as possible profit-taking or unwinding of leveraged staking after ETH’s strong rally since July. Santiment data shows ETH holders have been locking in between $500 million and $1 billion in profits daily over the last three sessions.

Hot PPI Reading Fuels Market Decline

The downturn deepened after July’s U.S. PPI showed stronger-than-expected inflation. The index rose 0.9% month-on-month, far above the 0.2% forecast, marking the biggest monthly gain since June 2022. Year-on-year, PPI hit 3.3%, above the 2.5% estimate.

The reading weighed on risk assets, leading ETH to its biggest one-day fall since August 1.

Despite the drop, ETH ETFs saw $729 million in net inflows on Wednesday, their second-largest single-day total ever. Over the past seven sessions, total inflows topped $3 billion.

Corporate treasuries have also increased holdings. The Strategic ETH Reserve reports that institutions have added 2.5 million ETH since June, with plans to invest several billion dollars more.

Ethereum Price Levels to Watch

ETH met resistance just above $4,700 within $100 of its $4,868 record before pulling back. Glassnode data shows this zone has seen heavy selling in the past. The drop brought ETH near $4,500, an important level to keep its bullish structure.

Derivatives data shows $346 million in futures positions were liquidated on Thursday, with $276 million from longs. If ETH stays above $4,500, analysts see a chance to retest its record and possibly reach $5,000, completing a bullish pennant pattern. Falling below $4,500 could send it toward $4,100.

Momentum Indicators Show Cooling Trend

The RSI and Stochastic Oscillator remain in overbought territory but are moving lower, which often signals short-term pullbacks after strong rallies.

The stablecoin and tokenization sectors are gaining fresh momentum, helped by pro-crypto regulations from the Trump administration. Analysts say the decentralized oracle network Chainlink (LINK) could benefit most.

Chainlink Seen as an Overlooked Opportunity

Market analyst Miles Deutscher believes LINK is one of the most attractive large-cap plays right now, though many investors may overlook it. In a post on X, he said Chainlink is well-placed to gain from the “institutionalization of cryptocurrency” and the growth of stablecoins, tokenization, and real-world assets (RWAs).

RWA total value locked has jumped from about $1 billion to over $13 billion in two years. This reflects growing awareness of the limits of traditional payment systems like SWIFT.

Institutional Support for Tokenization Grows

Major finance players are getting involved in blockchain solutions. BlackRock, which also issues crypto ETFs, is pushing tokenization. Stripe and Circle are also exploring blockchain-based platforms.

Deutscher calls Chainlink the “universal translator” for tokenized assets. Every tokenized stock, bond, or property needs an oracle for accurate data. Chainlink leads this space with around 84% market share.

Chainlink earns from on-chain fees across multiple blockchains and from enterprise clients paying for its services. These earnings fund operations and LINK token buybacks. Revenue from corporate deals paid in ETH or USDC is converted to LINK and placed in a treasury.

This builds reserves and creates buying pressure. LINK stakers earn about 4.32% annually, locking up more supply.

Deutscher says this creates a loop: adoption boosts revenue, which drives more LINK buying and staking, which improves security and use cases, leading to more adoption. He compared LINK to XRP, noting LINK’s stronger institutional adoption despite XRP’s larger market cap. Chainlink secures about $84.65 billion in value compared to XRP’s $85 million in DeFi TVL, yet XRP’s cap is twelve times bigger, which he sees as undervaluation for LINK.

Technical Breakout Suggests Further Upside

LINK has broken past the $20 resistance and is trading at $22. Deutscher compared this to Ethereum passing $4,000, suggesting the move could lead to more gains in the months ahead.