Crypto Market Takes a Tumble: What's Next for Bitcoin and Friends?

Cryptocurrencies took a nosedive on Thursday, with Bitcoin leading the pack. The drop came after news that wholesale inflation was higher than expected, making investors nervous. Bitcoin, which had hit a new high of $124, 000 the day before, fell below $118, 000. It later bounced back a bit but still ended lower. The government's decision not to buy more Bitcoin for its reserves didn't help either. Ethereum, the second-largest cryptocurrency, also took a hit after nearly breaking its previous record. Other major coins like XRP and Solana felt the pinch too. The market saw over $1 billion in losses, with many traders who bet on prices going up losing big. Interestingly, most traders on Binance, a popular crypto exchange, decided to buy during the dip, showing confidence in a rebound. The overall mood in the crypto world shifted from greed to something less extreme, according to the Crypto Fear & Greed Index. Meanwhile, a few coins like KuCoin Token and UNUS SED LEO managed to buck the trend and show small gains. Stocks had a mixed day, with the S&P 500 closing slightly higher, while the Dow and Nasdaq ended a bit lower. The rise in the Producer Price Index, which measures inflation, put pressure on stocks. Traders now think there's a slightly lower chance of the central bank cutting interest rates in September. Analysts are keeping an eye on key levels for Bitcoin. One on-chain analytics firm noted that the Ethereum to Bitcoin price ratio crossed a significant mark, which has historically signaled good times for Ethereum. Another analyst predicted that Bitcoin might dip a bit more, Ethereum could drop another 10%, and then smaller coins might have a moment to shine.