Bitcoin drops to $112,000 after UK inflation spike

The price of Bitcoin continues to fluctuate, once again causing concern among investors. After briefly touching $124,000, BTC dropped suddenly to $112,566. At the time of writing, the coin hovers around $113,600. This marks a 1.8% decline over the past 24 hours, with a trading volume of $71.29 billion.

Inflation figures spark nervousness

Volatility in the crypto market appears to be partly driven by the latest economic developments. In the United Kingdom, inflation has climbed to 3.8%, the highest level in a year and a half, raising concerns about potential interest rate hikes. In Europe, the situation remains stable, with inflation at 2%, in line with the European Central Bank’s target.

For investors in risk assets like crypto, rising inflation can have a double effect. On one hand, higher interest rates put pressure on prices. On the other hand, investors seek protection against currency devaluation. Bitcoin remains a noteworthy candidate in this regard.

🇬🇧 UK INFLATION SURGES TO 3.8%

• the highest in 18 months! pic.twitter.com/V1uTFLTft8

— Radar 𝘸​ Archie🚨 (@RadarHits) August 20, 2025

Technical levels tested

The drop to $112,566 brings BTC dangerously close to the support line around $112,000. If this level breaks, $110,000 could be next. Still, some traders remain optimistic, seeing this as the final dip before Bitcoin possibly shoots toward $130,000.

On the Binance trading platform, the increased volatility is clearly visible. The chart shows sharp movements, with a recent high at $124,474 and a low at $111,920. The price is moving within a downward channel, but the trading volume suggests that many investors remain active.

What’s next for Bitcoin?

It remains unclear whether Bitcoin has found its bottom. The market continues to be sensitive to macroeconomic news, and the coming weeks will be crucial. Anyone looking to act on this dip can explore where to buy crypto. The next few days will reveal whether $110K is the next target, or if a new upward trend is beginning.