Crypto markets steadied after U.S. Consumer Price Index (CPI) data came in largely as expected for August, keeping a September rate cut on the table and steering odds firmly toward a quarter-point move.
Headline CPI rose 2.9% year over year, matching forecasts, while core CPI held at 3.1%, according to the U.S. Department of Labor. The monthly headline CPI increased 0.4%, up from July’s 0.2% and slightly ahead of the expected 0.3%, while core inflation rose 0.3%, in line with estimates.
Soft inflation data has strengthened calls for a Federal Reserve policy pivot. Odds for a 25 basis point move climbed. Traders on prediction market Polymarket suggest there’s an 88% likelihood of lowered rates after Thursday’s release. Meanwhile, the probability for a 50 bps cut faded on CME FedWatch, signaling a dovish-but-measured path rather than an aggressive pivot.
The Federal Reserve’s Federal Open Market Committee (FOMC) last cut the federal funds rate on December 18, 2024, lowering it by 25 basis points to a target range of 4.25%–4.50%.
Wednesday’s print followed yesterday’s cooler-than-expected Producer Price Index report and a three-day run of net inflows into spot crypto ETFs.
Price action stayed orderly amid the news. According to The Block’s price page, bitcoin traded within the $113,000–$114,000 band that analysts have flagged as a “bullish gate,” while ETH is currently trading slightly above $4,400. Blockhead co-founder and managing editor Timothy Misir noted $757 million of net inflows to spot bitcoin ETFs on Sept. 10 and $172 million to ether funds, saying another soft inflation print “would likely accelerate the current risk-on move.”
Still, options markets remained defensive into the data. Short-dated ETH derivatives implied volatility sits below weekly measures, and the BTC/ETH put skew is still elevated. Traders are holding on to downside protection even as flows rebuild.
With CPI out of the way, traders are likely watching whether bitcoin can log a daily close above $113,000–$113,500 to open the $118,000 path, Misir notes. Failure to meet this close keeps the $109,000–$107,000 support zone in play.
At the same time, attention now shifts to next week’s FOMC meeting. Expert consensus from veterans like Goldman Sachs CEO David Solomon suggests the Fed will reduce funding rates, an outcome that’s typically bullish for BTC and risk assets.
Paul Howard, senior director at crypto market maker Wincent, shared a similar take. He also stated that markets are pricing in three rate cuts by early next year after the latest inflation data.
“We are bullish for rate cuts following the PPI and CPI data release,” Howard told The Block. “Analysts are pricing in 75bps before 2026, Q1, and if so, this aids the narrative for inflationary cryptocurrency prices this coming quarter. With interest rate cuts set to inject more hot money, we could expect BTC as an inflation hedge to move higher.”
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Trade Crypto On Coinhub Exchange
Trade Crypto On Coinhub Exchange
Stay ahead of the market by turning news insights into trading opportunities. With Coinhub Exchange, you can seamlessly buy, sell, and manage your digital assets, all in one secure platform. Take advantage of real-time market insights, deep liquidity, and fast execution for your favorite cryptocurrencies. Don’t just read about it — trade crypto now!
Disclaimer
The content of this article shown by Coinhub News, powered by The Block, is for informational purposes only and should not be construed as financial, legal, tax, or investment advice. Coinhub News and its affiliates are not a licensed financial advisor, legal advisor, broker, or tax advisor, and ... should not be considered as professional advice or a recommendation to engage in any specific investment, legal decision, or financial transaction. Cryptocurrency markets are highly speculative and volatile. Readers should perform their own independent research and consult with a qualified professional before making any financial or legal decisions. The opinions expressed in this article are those of the author and do not necessarily represent the views or opinions of the Company of its affiliates. Additionally, the Company does not make any representations or warranties regarding the accuracy, timeliness, reliability, or completeness of any information in this article. By accessing this content, you acknowledge that any reliance on the information contained in this article is solely at your own risk. The Company is not responsible for any financial losses, legal disputes, or other damages that may arise from reliance on this content or from any investment or legal decisions based on the information provided. Investing in cryptocurrencies involves substantial risks, including the risk of losing your entire investment, and you should carefully consider whether it is appropriate for your circumstances.
Read more
