Bitcoin climbed to a 19-day high this week, briefly topping $116,300 before trading around $115,680. The move has traders eyeing expectations that the U.S. Federal Reserve will begin cutting rates, a macro shift that typically supports risk assets including cryptocurrencies.
The immediate catalyst was softer-than-expected U.S. producer inflation for August: the Producer Price Index fell 0.1%, the first monthly decline since April. That print followed July’s spike and helped push markets to price in a high probability of a rate cut at the Fed’s September meeting. CME’s FedWatch now shows about a 92.7% chance of a 25 basis-point cut, according to market-implied odds.
Market researchers pointed to the inflation signal and easing selling pressure as the main drivers. Julio Moreno, head of research at CryptoQuant, told Decrypt that the lower PPI likely nudged traders toward rate-cut expectations. Sean Dawson of on-chain options platform Derive highlighted weakening jobs growth and said the market is positioned for easier policy. Meanwhile, Galaxy Digital CEO Michael Novogratz suggested the start of a Fed easing cycle could spark a larger rally later in the year.
On-chain indicators also show a decline in profit-taking: exchanges are seeing less selling pressure, which can remove a short-term cap on upward moves. At the same time, continued inflows into spot Bitcoin ETFs are adding fresh demand — a combination market participants say could push BTC toward new highs if momentum persists.
Altcoins showed mixed performance: Ethereum, XRP and Solana recorded modest single-digit gains, while tokens like Dogecoin and Hyperliquid posted stronger upticks (roughly 25% and 23%, respectively, in 24 hours).
Risk note: Market positioning can change rapidly. Price moves tied to macro data and rate expectations are subject to reversal if economic readings or Fed guidance shift. This analysis is informational, not investment advice.
Source: Decrypt. Read the original coverage for full details.