Bitcoin is rebounding to the $120,000 support level after a sharp drop which briefly filled a CME futures gap at $118,335, removing a key technical overhang. In a post on X, analyst Jelle described Bitcoin's move as a “sharp reaction” to the unexpected jump in the Producer Price Index (PPI), with Bitcoin dropping to clear recent lows before rebounding toward the $120,000 support level.Jelle Flags Volatility After PPI-Driven Sell-OffA chart shared by the analyst showed price action slicing through intraday lows and dipping into the $118,000 range before rebounding. The move partially filled a CME futures gap before Bitcoin recovered to trade back around the $120,000 support area. PPI leads to Bitcoin volatility PPI leads to Bitcoin volatility Notably, Bitcoin has failed to sustain the rebound, now trading at $118,335, a 1.9% drop in the past day. In the past hour, Bitcoin has dropped by 0.7%. For context, Bitcoin reached a new all-time high earlier today at $124,128 before falling to the current price. Jelle described the immediate aftermath as a volatile period and suggested that further swings are possible as traditional markets absorbed the inflation surprise.British Hodl Confirms CME Gap ClosureBritish Hodl, who on August 11 had pointed out the creation of a new CME gap at $118,335, confirmed today that the gap was now closed. The post-PPI sell-off briefly took Bitcoin into this gap range, completing the move before a swift rebound. With this gap now resolved, a notable piece of technical overhead has been removed from the market. CME filled Bitcoin CME Gap Filled Notably, the U.S. Bureau of Labor Statistics reported that July’s PPI rose 0.9%, the largest monthly gain since June 2022, and was up 3.3% year-over-year, higher than the expected 2.5%, leading to the current volatility in the crypto market. Meanwhile, core PPI, which excludes energy, trade, and food, increased 0.6%, marking its biggest rise since March 2022.Technical Context and Market OutlookBitcoin is now trading below the $120,000 level as it failed to absorb selling pressure in the immediate post-PPI volatility. Bull Theory noted that key support sits at $117,500, with a potential drop to $110,000 if it breaks. Meanwhile, resistance remains at $124,000. He urged the market to watch for the latest ETF report, as tariff-driven manufacturing pressures could influence next month’s CPI. Bitcoin technical pattern Bitcoin technical pattern Notably, analyst Ali Ash described the short-term Bitcoin outlook as bearish, noting that a failed support-resistance retest has created a textbook “Upthrust Trap” that drained buyer liquidity. He identified $116,000 as the first key support, warning that a break below could open the door to $110,000. Bitcoin looks bearish Bitcoin looks bearish Meanwhile, Crypto Patel has earlier noted that a confirmed close above the $120,000 level could pave the way for Bitcoin to reach $150,000, while rejection risks a pullback toward $111,000 or even $100,883. Similarly, Crypto Rover expected a new all-time high if Bitcoin clears resistance at $121,500–$123,000.
