On Friday (September 12), Bitcoin continued the upward trend that began this week, briefly breaking above $116,000 to reach a 19-day high. The US August CPI inflation was generally in line with expectations, while weekly initial jobless claims unexpectedly surged to a nearly four-year high, reinforcing rate cut expectations that provided momentum for the increase, as the market awaits the Federal Reserve's rate cut decision on September 17.
According to CoinGecko data, this king of cryptocurrency has risen 1.5% in the past 24 hours, continuing the upward momentum since breaking out of a two-week consolidation range on Wednesday. Bitcoin is currently trading at $115,217, having briefly spiked above $116,300 during the trading session.
Despite Bitcoin rising to a 19-day high, major altcoins like Ethereum, XRP, and Solana are still hovering around single-digit gains. Dogecoin and Hyperliquid have risen 25% and 23% respectively in the past 24 hours.
Julio Moreno, head of research at CryptoQuant, told Decrypt: "I believe this week's price movements are primarily driven by market expectations of the Federal Reserve cutting rates at the next meeting, as producer inflation data came in below expectations."
Expectations for a Federal Reserve rate cut strengthen.
The US Producer Price Index (PPI) unexpectedly fell by 0.1% in August, in contrast to the surge in July that triggered a market sell-off. This is the first decline in PPI since April, with the data indicating that it was mainly driven by falling prices of raw materials (such as crude oil) and a decrease in service costs.
Subsequently, on Thursday, the US Bureau of Labor Statistics released data showing that the August CPI rose by 2.9% year-on-year, in line with expectations; the core CPI remained at 3.1%. The monthly CPI rose by 0.4%, higher than July's 0.2%, and slightly above the expected 0.3%; core inflation rose by 0.3% month-on-month, matching market expectations. At the same time, weekly initial jobless claims unexpectedly surged to a nearly four-year high, indicating a rapid cooling of the US labor market. Both reports jointly reinforce expectations for the Federal Reserve to initiate rate cuts next week.
Moderate inflation data further strengthens the market's call for a shift in Federal Reserve policy. The probability of a 25 basis point rate cut has increased. Traders on the prediction market Polymarket believe that following Thursday's data release, the likelihood of a Federal Reserve rate cut could reach 88%. Meanwhile, the CME FedWatch Tool shows a decrease in the probability of a 50 basis point cut, indicating that the policy path is leaning dovish but still relatively mild, rather than aggressively shifting.
The last rate cut by the Federal Open Market Committee (FOMC) was on December 18, 2024, when it lowered the rate by 25 basis points, bringing the target range for the federal funds rate down to 4.25%–4.50%.
Wednesday's CPI data follows the previous day's lower-than-expected PPI report, and comes after three consecutive days of net inflows into the spot cryptocurrency ETF. Timothy Misir, co-founder and executive editor of Blockhead, pointed out that on September 10, the spot Bitcoin ETF recorded a net inflow of $757 million, while the Ethereum fund saw an inflow of $172 million. He stated that if another moderate inflation data release occurs, "it is likely to accelerate the current risk-on sentiment.
The Federal Reserve is preparing to restart the money printing machine.
With the CPI data in, market focus is shifting to next week's FOMC meeting. Senior market figures, including Goldman Sachs CEO David Solomon, generally expect the Federal Reserve to lower the benchmark interest rate, which usually bodes well for Bitcoin and risk assets.
Sean Dawson, head of research at the on-chain options platform Derive, stated: "As a rate cut next week is almost a foregone conclusion, the market is rising. The Federal Reserve is prepared to restart the 'money printing machine', especially in light of weak US job growth."
Bitcoin rebounded after dipping to a low of $110,714 on Tuesday, breaking above $114,000 on Thursday morning, marking the highest level since August 24. According to SoSoValue data, the US spot Bitcoin ETF recorded $757.1 million in inflows on Wednesday, a new high for eight weeks. Since September, US ETFs have cumulatively increased their holdings of Bitcoin worth $1.39 billion. DarkFrost stated: "These inflows are primarily benefiting from the much better-than-expected PPI data."
Michael Novogratz, founder and CEO of Galaxy Digital, said in an interview with CNBC on Thursday: "As the Federal Reserve begins its rate cut cycle, we may see another surge before the end of the year."
Wincent's senior director Paul Howard also shares a similar view. He stated that after the latest inflation data was released, the market has priced in the possibility of three rate cuts before early next year.
Howard told The Block: "We are optimistic about rate cuts after the PPI and CPI data releases. Analysts expect a cumulative rate cut of 75 basis points before the first quarter of 2026; if this comes true, it will drive inflationary increases in cryptocurrency prices this quarter. As rate cuts bring more hot money in, we expect Bitcoin to rise further as an inflation hedge."
Experts note that as key macroeconomic events approach this week, the market is showing significant divergence: futures traders are betting on Ethereum, while ETF investors are shifting their funds to Bitcoin. Data from analysis firm Coinanalyze shows that Ethereum's 24-hour futures trading volume reached $49.4 billion, surpassing Bitcoin's $42.9 billion. This surge in speculative interest in the second-largest cryptocurrency sharply contrasts with the capital flow in the ETF space towards Bitcoin.
Looking ahead, Moreno is bullish, believing that downward price pressure has eased, and on-chain data shows that selling pressure from profit-taking has nearly depleted. Dawson also holds an optimistic view, predicting that Bitcoin will reach new highs in the coming weeks, driven by continued inflows into ETFs.
Bitcoin Technical Analysis
Bitcoin's price has started a new round of rebound from the range of $111,200. BTC successfully broke through resistance levels of $112,500 and $113,500. Bulls pushed the price above $114,000 and $115,000, with a peak reaching $116,298, before entering a consolidation phase. The price briefly retraced below $115,800 but remains above the 23.6% Fibonacci retracement level of this rally from the low of $110,815 to the high of $116,298.
Currently, Bitcoin is trading above $114,500 and is above the 100-hour simple moving average. Additionally, an ascending trend line with support near $115,000 is forming on the BTC/USD hourly chart.
Immediate resistance on the upside is near $116,000. The first key resistance level is around $116,200. The next resistance may be at $116,800. If it can close above $116,800, the price may rise further. In this case, BTC is expected to challenge the $117,500 resistance level. If it breaks through again, the price may rise towards $118,400, with the next bullish resistance zone at $118,800.
If Bitcoin fails to break through the $116,200 resistance zone, it may start a new round of correction. Immediate support is near $115,000 and the trend line. The first major support level is at $113,550, close to the 50% Fibonacci retracement level of this rally from $110,815 to $116,298. The next support zone is near $113,000. If it further declines, the price may approach the $112,500 support level. Major support is at $110,500; if it falls below this, BTC may experience a significant drop.
Technical Indicators
Hourly MACD: The MACD is accelerating in the bullish zone.
Hourly RSI: The RSI for BTC/USD is currently above the 50 level.
Key support levels: $115,000, followed by $113,500.
Major resistance levels: $116,000, followed by $116,200.