The Bitcoin dip on Tuesday puts on hold for the upward trajectory of digital assets, at least for now.
The move came as it attempted to book profits within the mixed financial signals and schism language surrounding the potential replacement of Federal Reserve Chairman Jerome Powell.
While on-chain data suggests that profit acquisition is the main driver, sticky inflation remains a key point of competition.
According to Coingecko data, the world’s largest crypto trades at $117,250, down 4.5% from Monday’s record high.
Bitcoin drop matches 14,000 BTC spikes Replace the inflow Tuesday, according to Julio Moreno, director of research at Cryptoquant.
It is generally an obvious indication that traders are trying to sell their ideas, as they are trying to sell excess amounts to the exchange after the price of their assets has risen significantly, making them obvious signs that they are locking their profits.
“As prices yesterday reached a recent all-time high, the inflow of Bitcoin exchanges has skyrocketed,” Moreno said in X.
The DIP also occurred in the release of the US Consumer Price Index figures in June. Reading was in line with analyst expectations, but data shows a jump of 0.3 percentage points from 2.4% on Tuesday from 2.7% in June last year.
The higher the inflation rate, the lower the chances of short-term rate reductions, maintaining higher borrowing costs and limiting risk-on assets such as S&P 500 indexes and crypto under pressure.
The rise in inflation further strengthens Federal Reserve Chairman Jerome Powell’s stance on keeping the rate higher, a point of competition between Republicans and US President Donald Trump.
“There’s a formal process that’s already begun,” the Treasury Department said Tuesday in connection with Powell’s tenure. Powell’s current term as Federal Reserve Chair is expected to expire in May 2026.
The short-term outlook shows traders are skittish, but Moreno said Decryption“I don’t think it was on top.” He believes there could be a more violent Fed chair coming up, which would likely drive interest rate cuts.
The decision will be a “positive” benefit to the code, Moreno added.
Meanwhile, short-term holders are sitting on average profits of around 10%, according to the on-chain data analytics platform single.
Based on platform research, the 10% to 20% range is called “danger zones” and historically precedes price corrections as traders try to lock further profits rather than risking the downside.
Bitcoin has dropped by more than 8% from $109,000 after its 30-day market value.
