On Aug. 12, Bitcoin (BTC) dropped to $57,653, bringing its 24-hour losses to 2%, as traders positioned themselves ahead of a busy week filled with macroeconomic data.
The bullish momentum that propelled BTC above $60,000 at the end of last week is in question as bears and bulls fight to control the price.
Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin dropped from a high of $60,000 on Aug. 12, falling as much as 4% to an intraday low of $55,681, before recovering to the current price of $58,668.
Let’s look at the factors affecting Bitcoin price today.
Traders feel unsure about US inflation figures
Following the market volatility experienced during the week ending Aug. 11, this week’s US Consumer Price Index (CPI) and Producer Price Index (PPI) prints are expected to reveal the latitude the Federal Reserve has to meet pumped-up expectations around its first interest rate cut in September.
The CPI is expected to continue falling, which should empower the Fed to consider the all-important rate cut.
The UK is also expected to release its July CPI reading on Aug. 14, while Australia’s consumer confidence, which tracks sentiment around family finances, and Japan’s PPI, a measure of price developments of goods traded within the corporate sector, are scheduled for release on Aug. 13.
According to capital markets commentator the Kobeissi Letter, the labor market, one of the main driving factors behind the recent Bitcoin price crash, “is weakening.”
In an Aug. 12 post on X, the Kobeissi Letter said that the consumer confidence index “declined to 34.1 in July, the lowest level since March 2021,” suggesting that Americans are the most pessimistic about the ability to find a new job in three years.”
Kobeissi noted the job openings per unemployed ratio fell to 1.2 in 2024, down from 2.0 in 2022.
“The labor market is no longer tight.”
Macro market events tend to move crypto prices as they reveal the general state of the economy.
Mixed economic signals leave market participants unsure of the market's direction, leading to high volatility, such as that witnessed in Bitcoin’s price action on Aug. 12.
Regarding Fed rate cuts, market participants are pricing in near equal chances of a 0.25% and 0.5% cut in September as of Aug. 12, according to latest data from CME Group’s FedWatch Tool.
Bitcoin price has been a “roller coaster”
After a relatively calm weekend, Bitcoin’s price action remained flat during the early Asian trading sessions and part of the European session on Aug. 12, oscillating between $58,130 and $59,000. The price then jumped suddenly from $58,140 to $60,000 in less than two hours before rapidly undoing all these gains just before the start of the New York session.
The price then jumped up again on the Wall Street opening, rising 5% from a low of $57,834 to set a swing high at $60,700.
At the time of publication, Bitcoin continued its volatile trend, trading 2% below the intraday high of $60,244.
“Lower time frames are all over the place,” said independent trader Jelle in an Aug. 12 post on X.
Jelle, however, noted that the price was in the middle of a consolidation on the weekly timeframe.
“The weekly chart tells a different story. 165 days of mid-cycle consolidation. This cycle ain’t over.”
Fellow analyst Crypto Rover shared BTC price action on the five-minute timeframe, acknowledging that Aug. 12 was a “roller coaster” for traders.
“Great bounce last week on Bitcoin,” MN Capital founder Michael van de Poppe said in his latest Bitcoin analysis on X.
“I’d like to see a $60K break. If that happens, I'm sure we’ll be seeing a new all-time high in September/October."
Related: Bitcoin price drops below $59K as institutions stop buying stablecoins
Bitcoin liquidations ramp up
A sharp movement in the Bitcoin futures market appears to have caused BTC’s price volatility over the last 12 hours. The timing of the short liquidations coincided with the sharp rise in the price of the pioneer cryptocurrency.
Data from Coinglass shows that more than $20.16 million in BTC short positions have been liquidated over the last 12 hours. The total liquidations across the crypto market amounted to $112.20 million, with $61.84 million being short liquidations in the same period.
Typically, short liquidations occur when the price of the asset being traded suddenly spikes. This is because traders who were bearish on the asset and had opened short positions faced losses once the market suddenly moved upward over the last few hours.
According to data from blockchain data provider CryptoQuant, the number of Bitcoin transferred to exchanges spiked on Aug. 12 to 21,278 BTC, up from 9,132 BTC on Aug. 11.
Increased exchange inflows for a particular asset suggest increased selling pressure in the market.
With an increasing number of BTC sent to known exchange wallets, investors seem to be taking profits at current prices, explaining the current volatility in Bitcoin price.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.