Bitcoin Breaks Above $114K As Inflation Data Fuels Fed Cut Expectations
Bitcoin rose above $114,000 after U.S. producer price index data showed a 0.1% decline in August, easing pressure on inflation. The move boosted Bitcoin by 0.5% in the hour following the release.
Ethereum also gained slightly, trading at $4,382. Bitcoin’s price is now 2.3% higher compared to last week, though it remains 5.7% lower than its level 30 days ago.
The Bureau of Labor Statistics said “core” PPI, which excludes food, energy, and trade, rose 0.3% in August, lifting the annual figure to 2.8%. The increase highlights lingering inflation pressures despite broader declines.
Market expectations for monetary easing strengthened, with the CME FedWatch tool showing 88% of investors anticipate a 25 basis point rate cut at next week’s FOMC meeting. Another 12% expect a 50 basis point cut.
Prediction markets showed growing confidence in Bitcoin staying above $105,000 through September. Just a week ago, many traders were skeptical of such stability.
James Toledano, COO at Unity Wallet, said tomorrow’s CPI print could drive additional volatility. Historically, softer readings have sparked rallies across crypto, while hotter data has triggered pullbacks.
The Crypto Fear & Greed Index has shifted from a “greed” level of 70 last month to a neutral 49. Traders say this reflects uncertainty over how aggressive the Fed will be.
Analysts added that non-farm payrolls and unemployment data will also be closely watched. Any deviation from expectations could influence both equities and digital assets in the short term.
With monetary policy decisions approaching, investors are bracing for swings across crypto markets as sentiment tracks inflation data and Fed signals.
