Bitcoin experiences a brief drop below $25,000 in anticipation of upcoming inflation data this week.

The cryptocurrency market faced a decline as traders redirected their attention towards impending inflation data and absorbed the latest developments in the SEC’s legal battle with Ripple.

Bitcoin saw a decrease of over 2.8%, trading at $25,004.45, according to Coin Metrics. Ether, which often mirrors Bitcoin’s movements as a prominent cryptocurrency rather than an alternative coin, was down by about 4% at $1,540.10.

Bitcoin briefly slipped below the critical $25,000 support level for the first time since June.

Altcoins led the crypto market’s downturn as the Securities and Exchange Commission (SEC) argued on Friday for the need to appeal a landmark court ruling from July in its case against Ripple. XRP experienced a 5% drop, as reported by Coin Metrics, along with the Polygon token. Polkadot’s coin decreased by 4%, while Binance Coin, Solana’s sol token, and Litecoin all declined by roughly 3%.

Darius Tabatabai, co-founder of Vertex Protocol, remarked, “It feels like fatigue, and with a general pullback in liquidity from market makers, any move lower tends to be more volatile. However, the landscape remains demanding, marked by persistently low trading volumes and a significant absence of a large influx of users into the cryptocurrency space.

Bitcoin remains trapped in a narrow trading range, largely fluctuating between $25,000 and $30,000 throughout the year. Due to the ongoing scarcity of liquidity and volume in the market, attempts to push the price towards the higher end of this range have been feeble and unsustainable. Movements, both upward and downward, lacking clear catalysts, are often exacerbated due to the prevailing weak volume, with trading volume in August hitting its lowest point in over four years.

Investors are eagerly awaiting crucial inflation data this week following a series of stronger-than-expected economic indicators last week that raised concerns about the Federal Reserve potentially raising interest rates more than previously anticipated. The latest consumer price index and producer price index reports are expected on Wednesday and Thursday, respectively. Investors hope for subdued readings, although both indices are projected to increase due to rising energy costs.

While inflation could theoretically serve as a positive catalyst for Bitcoin, it could also deter certain investors who are apprehensive about a potential economic downturn from risky assets.