Bitcoin (BTC) fell below the $120,000 mark on Monday, retreating after last week’s strong rally as traders engaged in profit-taking. Despite the dip, the broader uptrend remains intact, with market sentiment still leaning positive.

Investors are now closely watching key U.S. inflation reports — the Consumer Price Index (CPI) and Producer Price Index (PPI) — due later this week. Analysts expect these releases to play a pivotal role in shaping crypto market direction for the remainder of August.

Inflation Data Could Drive Market Volatility

A softer-than-expected inflation reading could boost expectations for a more dovish U.S. Federal Reserve stance, potentially fueling risk appetite and pushing Bitcoin higher. Conversely, hotter-than-expected figures could increase the likelihood of tighter monetary policy, putting fresh pressure on cryptocurrency prices.

ETF Inflows Remain Supportive

Even as Bitcoin prices eased, Bitcoin-linked exchange-traded funds (ETFs) recorded $253 million in net inflows on Monday. While this was down from Friday’s pace and far below July’s record volumes, it marks a rebound from early August’s modest outflows.

Some analysts note that stronger daily inflows could help Bitcoin regain upward momentum and test recent highs once again.

Ethereum ETFs See Stronger Demand

Interestingly, Ethereum (ETH)-linked ETFs attracted $461 million in new capital — nearly double Bitcoin’s inflows. This trend may reflect investor diversification strategies as well as optimism around Ethereum’s upcoming network upgrades and its expanding role in the decentralized finance (DeFi) space.

Corporate Adoption Continues to Grow

Institutional interest in Bitcoin remains robust. Japanese investment firm Metaplanet added 518 BTC to its corporate treasury, continuing a growing trend of publicly listed companies holding Bitcoin as part of their balance sheet strategy.

Such moves help provide structural demand support for Bitcoin, even during short-term market pullbacks.

Outlook: Bullish Potential If Data Supports

While Monday’s pullback highlights the crypto market’s sensitivity to profit-taking and macroeconomic uncertainty, several factors remain supportive:

• Ongoing ETF inflows
• Expanding corporate adoption
• A still-bullish macro backdrop

If this week’s CPI and PPI reports deliver softer inflation figures, the stage could be set for Bitcoin to mount another rally toward recent highs.