Bitcoin Rises as Markets Digest Inflation Data Ahead of Fed Rate Decision

U.S. consumer inflation held steady in August, with headline CPI rising 3.4% year over year and 0.4% month over month, while core CPI eased to 2.4% annually but registered a hotter-than-expected 0.3% monthly gain. Markets treated the data as mixed: futures and prediction markets still price a better-than-even chance of a 25-basis-point Fed hike next week, and crypto assets rallied with Bitcoin approaching $79,000 and broader market gains lifting total capitalization near $2.7 trillion.

By AI NewsroomPublished 21 minutes agoUpdated 20 minutes ago0 views

Bitcoin Rises as Markets Digest Inflation Data Ahead of Fed Rate Decision

Why It Matters

The report is the last major inflation reading before the Federal Reserve meets Sept. 15-16, and the hotter monthly core print has kept the probability of another 25bp hike elevated—an outcome that would affect both risk assets and interest-rate expectations. Crypto’s strong intraday response underscores how quickly traders are pricing macro signals into digital-asset flows and derivatives activity.

Key Facts

headline CPI (Aug): 3.4% year over year, 0.4% month over month
core CPI (Aug): 2.4% year over year; 0.3% month over month (vs 0.2% expected)
federal-reserve meeting: Sept. 15-16 (decision Wednesday at 2pm ET)
odds of 25bp hike: CME FedWatch ~69%; Polymarket ~62%; Myriad ~61%
bitcoin price action (Friday): opened $76,529, intraday low $76,040, intraday high $79,837, trading near $79,007

August’s Consumer Price Index largely matched market expectations on the headline measures, with annual inflation at 3.4% and a 0.4% increase from July, according to Bureau of Labor Statistics data released Friday. Stripping out food and energy, core CPI cooled to 2.4% year over year—the weakest annual core reading since 2021—but the monthly core figure came in at 0.3%, above economists’ 0.2% forecast and drawing particular attention from traders.

The CPI print arrives five days before the Fed’s Sept. 15-16 meeting and is the last major datapoint the central bank will see before voting. Markets continue to price a meaningful chance of another quarter-point increase: CME FedWatch shows about a 69% probability, while prediction markets place the likelihood nearer to 61–62%. The report follows earlier signs of Fed officials’ inclination to keep tightening, including three regional presidents who dissented in favor of a hike at July’s meeting and remarks in Jackson Hole saying more work remained on inflation.

Cryptocurrency markets rallied after an initial dip following the release. Bitcoin fell briefly to the day’s low immediately after the print, then recovered and climbed toward $79,000, reaching an intraday high near $79,837. Technical indicators shifted bullish: the 50-day exponential moving average crossed above the 200-day EMA (a nascent golden cross), the RSI sits below overbought levels at about 59.7, and the Average Directional Index in the 40s suggests a substantive trend. Traders are watching the retracement band between roughly $73,986 and $75,569 as key support, with $82,281 earmarked as the next upside target to extend the rally.

The broader crypto complex also gained ground. Ethereum led major tokens higher, up about 7.48% to reclaim $2,611, while Solana rose roughly 4.53% above $100. Zcash was notable, up 23.09% over the past week and 4.71% on the day, and total market capitalization approached $2.7 trillion. Sentiment measures flipped toward risk appetite: the Crypto Fear & Greed Index jumped to 73, though the Altcoin Season Index remains at 38, indicating Bitcoin still dominates market interest. Despite the rally, spot Bitcoin ETFs recorded a net outflow of about $330.5 million on the day, and derivatives activity increased—open interest in crypto futures rose to $429.99 billion (up 1.52%), 24-hour volume climbed to $877.11 billion (up 2.27%), and the session triggered approximately $897.09 million in liquidations split between roughly $493.85 million of longs and $403.24 million of shorts.