Key Highlights
- Bitcoin climbed to $78,703, up 2.11%, after the U.S. CPI report matched expectations.
- Ethereum returned above $2,500, while Solana moved back above $100 as the crypto market recovered.
- Traders now see a 78% chance of a 25-basis-point Fed rate hike at the next meeting.
Bitcoin climbed back above $78,000 on Friday after the U.S. August CPI report showed headline inflation broadly in line with expectations. The rebound followed a decline below this level a day earlier.
At the time of reporting, Bitcoin traded at $78,703, up about 2% over the previous 24 hours, according to data from CoinMarketCap as of September 11 (3:25 PM UTC). The move pushed Bitcoin’s market capitalization to about $1.58 trillion, as the cryptocurrency regained ground after the market reacted sharply to the previous day’s inflation-related data.
U.S. inflation meets expectations
The recent U.S. CPI report showed that consumer prices rose 3.4% in August compared with the same month last year.
The figure matched expectations. On a monthly basis, CPI increased by 0.4%, also meeting the market forecast, according to data from the U.S. Bureau of Labor Statistics.
The core CPI figure also came in line with expectations. Core CPI, which leaves out food and energy prices, rose 2.4% year-over-year. This was its lowest level since 2021. However, the monthly core CPI reading increased 0.3%, slightly above the 0.2% that was expected.
Bitcoin recovers after PPI sell-off
Meanwhile, the report followed the release of U.S. Producer Price Index (PPI) data a day earlier. PPI rose 5.4% year over year in August, matching expectations.. The higher-than-expected reading was followed by a sharp decline across the crypto market, with Bitcoin also dropping below $78,000.
In short, with the new CPI figures matching expectations, Bitcoin found room to recover. Other cryptocurrencies also benefited from it. According to data from CoinMarketCap, Ethereum has returned above the $2,500 level, while Solana has also moved back above $100.
Fed rate hike odds rise
However, the inflation report did not stop traders from increasing their bets on a Federal Reserve rate hike. According to data from Polymarket as of September 11 (3:25 PM UTC), there’s a 78% chance that the Fed would raise interest rates by 25 basis points at its meeting the following week.
A rate increase would mark the first Fed hike since July 2023, when the central bank raised rates by 25 basis points.
Global tensions keep traders alert
The rate decision is also coming as the wider global situation remains tense. The U.S.-Iran war continues to escalate, while Iranian-backed Houthi forces have taken control of the Bab al-Mandeb Strait. The waterway is a major route for oil shipments, raising concerns about possible supply disruptions.
Oil prices have also remained high. Brent crude was trading above $100, although it had fallen more than 4% on the day, according to TradingView as of September 11 (3:25 PM UTC).
The European Central Bank also raised interest rates by 25 basis points the previous day. The ECB pointed to uncertainty from the Middle East crisis and rising inflation as part of the reason for the move.
For Bitcoin, the CPI report has therefore brought a fresh price rebound, while traders continue to watch the Fed’s next move and the wider economic picture.
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