Bitcoin Pulls Back After Rally Above $123,000 Amid Profit Booking, CPI Shock
Bitcoin prices fell sharply on wednesday, July 16, as the world’s largest cryptocurrency dropped 2.83% in the past 24 hours to trade near $116,541. The decline marks a clear correction after a powerful multi-week rally that briefly pushed BTC above $123,000, and analysts now believe the market is entering a consolidation phase.
The pullback came amid widespread profit-taking, long liquidations, and a stronger-than-expected U.S. CPI report, which dented investor risk appetite. Over $1.5 billion in realized profits by large holders—and up to $3.5 billion across all investor classes—signaled that the market was primed for a temporary cooldown.
Experts: “Healthy Pullback Within a Strong Uptrend”
Avinash Shekhar, Co-founder and CEO of Pi42, called the dip a textbook correction:
“Bitcoin’s sharp over $6,000 decline is a textbook case of healthy profit-taking after an extended rally that pushed prices past $123,000.”
He added:
“Bitcoin now appears to be entering a consolidation phase, with likely support at $110,000 and resistance around $125,000.”
At the time of writing, BTC trades at $116,541.87, with a market cap of $2.31 trillion, per Binance.com data. The 24-hour trading volume stood at $93.41 billion, with 19.89 million BTC in circulation.
CPI Data, Retail FOMO Spark Pressure
A key macro trigger was the U.S. Consumer Price Index (CPI), which came in stronger than forecast, leading to speculation that the Federal Reserve could remain cautious on rate cuts. This macroeconomic headwind further reduced demand for risk assets like crypto.
Adding to the caution, Bitcoin’s social dominance soared above 43%, reflecting increased retail FOMO and heightened euphoria—often a precursor to corrections.
Over $333M Liquidated, Altcoins Also Fall
According to CoinSwitch Markets Desk, long positions worth over $333 million in BTC and $113 million in ETH were liquidated in the past day, signaling aggressive de-leveraging in derivatives markets.
Other cryptos also reflected the bearish tone:
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Ethereum (ETH) hovered around $3,013, remaining relatively stable. EMJ Capital reaffirmed its bullish thesis that ETH could reach $10,000 due to staking ETFs, deflationary protocols, and institutional adoption.
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XRP tumbled from $3.02 to $2.78, ahead of the ProShares XRP Futures ETF launch, though it rebounded to $2.87 late in the session.
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Filecoin (FIL) fell 6%, testing support near $2.50, under heavy selling pressure.
“Crypto Week” in U.S. Congress Could Shape the Next Rally
Despite near-term turbulence, long-term investor sentiment is buoyed by ongoing legislative activity in the U.S. Congress. Dubbed “Crypto Week,” this period marks progress on bills like the:
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Clarity Act
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GENIUS Act
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Anti-CBDC Surveillance Act
These bills aim to define crypto regulation, authorize stablecoin issuance, and block any federal Central Bank Digital Currency (CBDC). A full House vote is expected soon, with the Senate preparing its own version.
CoinSwitch Markets Desk commented:
“If passed, these laws could provide clarity that fuels new waves of institutional investment.”
Deutsche Bank: BTC Volatility Now at Record Lows
In a research note, Deutsche Bank highlighted that Bitcoin’s volatility is now historically low, a sign that the asset is transitioning from a speculative tool to a long-term strategic holding.
Market Outlook: Sideways Momentum Likely Before Next Move
With Bitcoin comfortably above the $110K support level, analysts expect range-bound movement in the coming weeks. Many see the consolidation as healthy, providing a stable foundation for the next leg up, especially as macro and regulatory developments mature.