Bitcoin surged to a new all-time high of $123,231 on Coinbase, mirroring a record rally in the S&P 500, which reached 6,457. This upward momentum follows the release of July's US Consumer Price Index (CPI) data, which indicated inflation holding steady at 2.7% year-over-year, slightly below the anticipated 2.8% and remaining unchanged from the previous month. The CPI report showed a 0.2% overall increase, a decrease from June's 0.3%. Following this data, the CME FedWatch tool now reflects a 93.9% probability of the Federal Reserve implementing an interest rate cut at their September meeting. Historically, Fed rate cuts and a departure from quantitative tightening have positively impacted Bitcoin's price. Furthermore, market sentiment is buoyed by optimism surrounding U.S. President Donald Trump's economic agenda, particularly the "One Big Beautiful Bill," which could stimulate spending, inflation, and overall market risk appetite. Investor interest in Bitcoin and Ethereum spot ETFs continues to fuel bullish sentiment. Farside Investors reported that Bitcoin ETF net inflows reached $65.9 million, while Ethereum ETFs saw $523.9 million in share purchases on a single Tuesday. The Ethereum ETF surpassed $1 billion in inflows on Tuesday, and Bitcoin ETFs have accumulated $1.02 billion since the previous Friday. Liquidation data from Hyblock indicates Bitcoin breaking through a short liquidation cluster commencing at $122,500, with potential for further forced liquidations up to $124,000. CoinGlass data suggests that nearly $2 billion in short positions could be liquidated if Bitcoin's price moves through the $122,800 to $125,500 liquidity cluster. Bitcoin's market capitalization now exceeds $2.45 trillion, contributing to a new record total cryptocurrency market capitalization of $4.15 trillion.

Disclaimer: This article does not contain investment advice or recommendations. All trading involves risk, and readers should conduct their own research before making financial decisions.

Tags: #Bitcoin #Cryptocurrency #Ethereum #BitcoinETF #EthereumETF #Markets #Inflation #FederalReserve #CryptoInvesting

Author: Big Smokey Source Attribution: Originally published at Cointelegraph on Wed, 13 Aug 2025 21:31:11 GMT

Frequently Asked Questions (FAQ)

Market Performance and Influences

Q: What drove Bitcoin to its new all-time high? A: Bitcoin's surge to a new all-time high was influenced by a combination of factors, including the strong rally in the S&P 500, positive US Consumer Price Index (CPI) data indicating steady inflation, and the expectation of a potential Federal Reserve interest rate cut. Investor optimism regarding President Trump's economic agenda and robust inflows into Bitcoin and Ethereum ETFs also played a significant role. Q: How does US inflation data, like the CPI, typically affect Bitcoin's price? A: When CPI data shows inflation holding steady or decreasing, especially if it's below forecasts, it can lead to expectations of a less hawkish stance from the Federal Reserve. This can translate to a higher probability of interest rate cuts, which historically have been favorable for risk assets like Bitcoin, often leading to price increases. Q: What is the significance of the CME FedWatch tool in relation to Bitcoin's price? A: The CME FedWatch tool tracks market expectations for Federal Reserve interest rate changes. A higher probability of an interest rate cut, as indicated by the tool, often suggests a more accommodative monetary policy, which can boost investor appetite for risk assets such as Bitcoin. Q: How do Bitcoin and Ethereum ETFs contribute to market sentiment? A: The strong net inflows into Bitcoin and Ethereum ETFs demonstrate significant investor demand and confidence in these digital assets. This increased institutional and retail interest fuels bullish sentiment and can directly contribute to price appreciation.

Market Dynamics and Liquidations

Q: What are "short liquidation clusters" in the context of Bitcoin's price movement? A: A "short liquidation cluster" refers to a concentration of open short positions at specific price levels. When Bitcoin's price rises significantly, these short positions are forced to close (liquidate) to limit losses. This forced buying can further accelerate the upward price movement, potentially leading to cascading liquidations. Q: How does the total cryptocurrency market capitalization reflect the overall health of the crypto market? A: The total cryptocurrency market capitalization provides a broad overview of the market's value. When this figure reaches new all-time highs, it indicates widespread growth and increased investor participation across the entire cryptocurrency ecosystem, not just for individual assets like Bitcoin or Ethereum.

Crypto Market AI's Take

The recent Bitcoin surge to an all-time high underscores the interconnectedness of macroeconomic factors, investor sentiment, and the evolving digital asset landscape. As AI becomes increasingly integrated into financial markets, tools like AI trading bots and predictive analytics are becoming essential for navigating this complex environment. Our platform leverages advanced AI to provide real-time market insights and automated trading strategies, helping investors capitalize on these dynamic shifts. For those looking to understand the underlying technology driving these markets, our AI tools and insights can offer a deeper perspective on how artificial intelligence is reshaping finance, from algorithmic trading to sophisticated market analysis.

Bitcoin hits record high as traders expect liquidations to propel BTC above 25K

Frequently Asked Questions (FAQ)

Market Performance and Influences

Market Dynamics and Liquidations

Crypto Market AI's Take

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