Markets are on edge ahead of the U.S. consumer price index (CPI) report, with both major cryptocurrencies and smaller tokens showing strength. Bitcoin (BTC) traded around $114,186.99 as traders positioned for a potentially market-moving print, while smaller coins including PUMP, AVAX and MNT rose between 8% and 11% in the past 24 hours. The biggest top-100 gainer was Provenance Blockchain’s HASH, which surged about 28%.
The Provenance Blockchain Foundation announced a dynamic inflation model this week designed to protect stakers from dilution by adjusting rewards based on network conditions. The change is intended to better align incentives between users and the protocol, encouraging longer-term participation and healthier supply dynamics.
Why the CPI matters: a softer-than-expected CPI print would likely strengthen expectations for a Federal Reserve rate cut and could accelerate gains across crypto markets. Bitunix analysts say a dovish CPI could trigger a short squeeze that pushes bitcoin into the 115,000+ liquidity zone. Conversely, stronger inflation that lifts the U.S. Dollar Index could test support near 111,000 and — if broken — open the door to a retest of the 108,500–109,000 zone.
Derivatives positioning
Open interest in bitcoin futures and perpetuals listed worldwide remains elevated at roughly 736,000 BTC, just shy of last month’s record of 748,000 BTC, indicating heavy pre‑CPI positioning. Short-term implied volatility on Volmex stood near 35.50%, implying an expected one‑day BTC move of about 1.85%. At the same time, options activity has picked up: BTC options open interest climbed above 50,000 BTC (the most since April), and ether options OI rose to roughly 260,000 ETH, the highest since August 2024. On Deribit, 25‑delta risk reversals continue to skew toward puts, and OTC desks have reported bearish flows into September expiries — including $4,000 ETH puts.
Token outlook
Mantle’s MNT hit a record high of $1.62 after heavy derivatives activity on Bybit. Staking yields advertised on Coinbase show an annualized return near 71%, which has driven more than two-thirds of MNT’s circulating supply into staking contracts and thinned exchange liquidity. Bybit’s 24-hour trading volume in MNT jumped to roughly $195 million (an 83% rise) while open interest increased about 20%, outpacing the ~15% price gain as traders added leveraged positions. Those dynamics helped HASH and other small-caps outperform in the short term, pushing the “altcoin season” sentiment higher (the altcoin season index rose to 67/100).
Bottom line: markets are priced for a range of CPI outcomes. A dovish print could accelerate upside and broaden an altcoin rally; a hotter print would likely increase volatility, lift the dollar and create downside pressure — especially for leveraged positions. Traders should monitor liquidity zones, options flows and open interest, and be mindful that leverage can amplify losses as well as gains.
Source: CoinDesk. Read the original coverage for full details.