Emre Yumlu 
Bitcoin continues to maintain stability around the $114,000 level after the release of U.S. Consumer Price Index (CPI) data that aligned closely with forecasts. The numbers fueled optimism for a Federal Reserve rate cut in September, with markets increasingly pointing to a 25 basis point move rather than a more aggressive shift.
Inflation Data Matches Market Expectations
According to data from the U.S. Department of Labor, headline CPI rose 2.9% year-over-year, in line with expectations. Core CPI remained unchanged at 3.1%. On a monthly basis, headline inflation increased 0.4%, slightly above the forecast of 0.3%, while core inflation climbed 0.3%, right on target.
These softer inflation readings reinforced hopes for a Federal Reserve pivot. Prediction markets now assign an 88% probability to a 25 bps cut in September, while the likelihood of a deeper 50 bps cut has diminished significantly.
Fed’s Previous Move and the Road Ahead
The last time the Federal Reserve adjusted interest rates was on December 18, 2024, when it lowered the federal funds rate by 25 basis points to a target range of 4.25%–4.50%.
Attention now turns to the September 17 FOMC meeting, where analysts, including Goldman Sachs CEO David Solomon, expect another quarter-point reduction. Such a move is generally considered supportive of risk assets like Bitcoin.
Market Reactions: Bitcoin and Ethereum Stability
Following the data, price action across crypto markets remained steady.
-
Bitcoin (BTC) traded within the $113,000–$114,000 range, a zone many analysts describe as a bullish threshold.
-
Ethereum (ETH) hovered just above $4,400, reflecting similar resilience.
Market observers note that a daily close above $113,000–$113,500 could open the door to $118,000, while failure to break that range might bring support levels around $109,000–$107,000 into play.
Institutional Inflows Fuel Optimism
Institutional participation has been strong in recent sessions. On September 10 alone, spot crypto ETFs recorded $757 million in net inflows to Bitcoin funds and $172 million to Ethereum products.
Analysts suggest that continued moderation in inflation could amplify risk appetite. One market expert highlighted that sustained inflows combined with easing monetary policy could strengthen the case for higher crypto valuations.
Expert Insights: Rate Cuts as a Crypto Catalyst
Paul Howard, senior director at crypto market maker Wincent, pointed out that traders are now pricing in up to 75 basis points in cumulative cuts by Q1 2026. He argues that lower interest rates will inject fresh liquidity into markets, a scenario that often benefits Bitcoin as a hedge against inflation.
“Rate cuts will allow hot money to flow back into risk assets. This dynamic could reinforce Bitcoin’s role as an inflation shield and drive its price higher in the coming quarter,” Howard explained.
*Not Investment Advice!
Also, in the comment section, you can freely share your comments and opinions about the topic. Additionally, don’t forget to follow us on Telegram, YouTube and Twitter for the latest news and updates.