The cryptocurrency market closed Friday in the red, with Bitcoin falling below $108,500 – its lowest level since early July. The drop of 3.5% on the day was mirrored by other major assets. Ethereum lost 4%, XRP fell nearly 5%, and the broader market saw a 3.4% decline in total market capitalization.
The CMC100 index, which tracks the top 100 cryptocurrencies by market cap, also dropped 3.6%. A few exceptions stood out – Pyth Network gained significantly after its partnership with the U.S. Department of Commerce – but most top coins traded lower than yesterday.
Inflation and Consumer Data Drive Concerns
Friday’s downturn followed the release of new U.S. economic data. The core Personal Consumption Expenditures (PCE) index rose 0.3% in July and 2.9% year-on-year – slightly above the Federal Reserve’s 2% target but still within expectations.
While the data did not surprise markets, it reinforced existing uncertainty around monetary policy. A rate cut in September remains widely anticipated, with futures markets pricing in an 87% chance of a 0.25% reduction. However, the inflation data complicates that outlook and may cause the Federal Reserve to wait for more evidence before adjusting rates.
At the same time, the University of Michigan’s consumer sentiment index dropped to a three-month low. Survey data showed growing concerns about high prices and declining personal financial conditions across age and income groups. Inflation expectations for the next year also rose to 4.8%.
We’ve released a full guide to recognizing presale scams!
It covers how these schemes work, how they trap investors – and how to spot the red flags. Check it out here!
Broader Financial Markets Also Under Pressure
U.S. stock indexes also fell. The Nasdaq lost over 1%, led by a 3% drop in Nvidia’s share price. The S&P 500 fell by 0.8%, and the Dow dropped 0.5%. The weakness in equities added pressure on crypto, which has recently moved more in sync with risk assets like tech stocks.
The current environment includes cautious positioning ahead of next month’s Federal Reserve decision. Analysts point out that further volatility is likely, especially with labor market data expected next week and additional inflation reports scheduled for early September.
Read also: How Interest Rates Impact Bitcoin: Exploring the Correlation
What’s Next?
While the decline in crypto prices on Friday followed broader market trends, it was driven largely by macroeconomic signals – not sector-specific news. Inflation data, weak consumer sentiment, and uncertainty around interest rate policy all played a role in today’s pullback.
Attention now shifts to labor market indicators due next week and the Federal Reserve’s next moves in mid-September. Until then, short-term volatility in crypto may remain higher as markets adjust expectations.
