Bitcoin experienced a notable upswing, reaching a 19-day high, attributed to newly released U.S. inflation data that has bolstered expectations of an impending interest rate cut by the Federal Reserve. This bullish trend in the cryptocurrency market is complemented by significant ETF inflows and a noticeable decrease in selling pressure among traders.
In the latest trading session, Bitcoin gained 1.5% over a 24-hour period, building on a previous rally that broke a two-week period of stabilization. Currently, Bitcoin is trading at approximately $115,680, after peaking just above $116,300 earlier in the day.
Market analysts point to a decrease in the U.S. Producer Price Index (PPI) as a catalyst for this price movement. The August PPI unexpectedly declined by 0.1%, contrasting sharply with a substantial increase in July that had prompted a sell-off in the market. This first decline since April has been attributed to lower prices of unprocessed goods, such as crude oil, along with reduced service costs.
Julio Moreno, the head of research at CryptoQuant, expressed confidence in this week’s upward price action, noting that market participants are increasingly anticipating a rate cut in the Federal Reserve’s upcoming meeting. According to the CME’s FedWatch tool, there is a striking 92.7% probability of a 25 basis point cut, with a half-point reduction considered unlikely at just 7.3%.
Sean Dawson, head of research at Derive, echoed this sentiment, stating that the likelihood of a rate cut could be a critical factor in stimulating market gains. He emphasized the Fed’s likely return to a more accommodative monetary policy, particularly in light of sluggish job growth across the U.S. economy.
Michael Novogratz, founder and CEO of Galaxy Digital, has shared a bullish outlook for the coming months. He anticipates a significant price surge toward the end of the year as the Federal Reserve embarks on a monetary easing cycle, which could have a profound effect on cryptocurrency valuations.
Further boosting the market’s positive sentiment is the observation from analysts that selling pressure among investors who were taking profits has significantly diminished. This reduction in selling activity suggests that the conditions are ripe for Bitcoin to climb further.
While Bitcoin has captured headlines with its recent performance, key altcoins such as Ethereum, XRP, and Solana are generally seeing smaller, single-digit gains. In contrast, cryptocurrencies like Dogecoin and Hyperliquid have reported impressive gains of 25% and 23%, respectively, over the past 24 hours, showcasing the broader volatility and opportunity within the cryptocurrency landscape.
