Bitcoin Plunges 15% as Inflation Fears and Treasury Warnings Spark Market Panic

Blood in the crypto streets as BTC tanks on macro double-whammy.

Here's what's rattling traders:

The inflation boogeyman returns

August's CPI print came in hotter than a GPU mining rig, triggering risk-off waves across all markets. Bitcoin—still trading like a tech stock on steroids—got hammered hardest.

Treasury throws gasoline on fire

Some bureaucrat muttered about 'digital asset risks' during a coffee break. Markets interpreted this as: 'Sell everything.' Classic overreaction—but when has crypto ever been rational?

Silver lining for degenerates

This flushout killed leverage (good) and created juicy entry points (better). Meanwhile, traditional finance keeps proving it understands crypto like your grandpa understands TikTok.

Scott Bessent’s Bitcoin Stance Shakes Confidence

Just as traders were processing inflation news, U.S. Treasury Secretary Scott Bessent added more fuel to the fire. In an interview, he stated that the government would not be purchasing any more Bitcoin for its strategic reserve. Bitcoin, already struggling under the weight of liquidation pressure, dropped further—falling below $118,000.

Bessent confirmed that the U.S. holds $15–$20 billion worth of Bitcoin, mostly from confiscated assets. However, he made it clear that no new purchases would be made. This announcement dampened optimism, especially after recent excitement over the idea of the U.S. treating bitcoin as a strategic reserve asset. While the government plans to stop selling its holdings—a move that might support prices longer term—it won’t be adding more to its stash. This left many in the crypto market questioning Washington’s true stance on Bitcoin.

Notably, the timing of Bessent’s statement couldn’t have been worse. Just hours earlier, Bitcoin had overtaken Google’s market cap. That milestone now seems like a distant memory as the market shifts into risk-off mode.

Bitcoin Liquidation Wipeout: The Data Behind the Crash

CoinGlass provided the hard numbers behind this chaos. In just 24 hours, 218,017 traders were liquidated. Bitcoin alone saw $100.34 million in long positions wiped out. ethereum was hit even harder with $102.33 million long liquidations. The biggest single liquidation? A $10 million BTCUSD long position on Bybit.

These mass liquidations weren’t entirely unexpected. Technical analysts had already warned about a bearish divergence on the charts and a potential double top. Bitcoin’s drop from $123,400 to under $118,000 confirmed the breakdown of support. Traders who had taken highly Leveraged long positions were among the first to suffer.

What’s more, the liquidation cascade wasn’t just driven by technicals. Macroeconomic uncertainty and lack of new institutional support have made Bitcoin vulnerable. Without fresh capital flowing in, any bad news becomes a catalyst for selling.

Bitcoin’s Next Move: Key Levels to Watch in a Shaky Crypto Market

With volatility spiking, traders are watching Bitcoin’s next moves closely. The $120,000 level is now resistance. If Bitcoin can’t break back above that mark soon, further downside could follow. Analysts are looking at $112,000 as a crucial support. A drop below this could drag the crypto market even lower.

But not all hope is lost. If Bitcoin consolidates above $117,000, altcoins might get a chance to shine. Still, the odds of a sideways trend or even a deeper pullback are high. Recent price action echoes the double top seen earlier this year, which led to a drop as low as $75,000.

Market sentiment remains fragile. Investors are caught between bullish long-term fundamentals and bearish short-term signals. The U.S. debt has hit $37 trillion, which could eventually support Bitcoin’s narrative as a hedge. But in the immediate term, rate cut uncertainty, inflation, and liquidation risk dominate.

Scott Bessent, Bitcoin, and the Bigger Picture in the Crypto Market

Despite the recent turmoil, Scott Bessent’s comments show that Bitcoin is firmly on Washington’s radar. The Treasury holding $15–$20 billion in BTC is no small detail. Even without new purchases, the decision to stop selling is a major policy shift. Bitcoin is now being treated as a long-term store of value—alongside gold.

Still, the crypto market needs more than symbolic support. With inflation sticky and interest rate cuts now in doubt, institutional investors may pause their exposure. Heavy selling shows that crypto remains highly sensitive to policy shifts and economic data.

Bitcoin’s future looks bright long term, but the road ahead remains bumpy. Traders should brace for more volatility as macro conditions evolve. The message is clear: when inflation data hits or Treasury officials speak, expect big moves in the crypto market.