Bitcoin Could Extend Rally on Reduced Profit-Taking, Cooler Inflation and Rate-Cut Odds

• Primary drivers: lower producer inflation, exhausted profit-taking, and Fed rate-cut odds.

• Market indicators: BTC rose ~1.5% in 24 hours, peaking above $116,300; CME FedWatch shows ~92.7% odds of a 25bp cut.

• On-chain & flows: on-chain data signals reduced selling pressure; analysts expect renewed ETF inflows through year-end.

Bitcoin rally front-run: Bitcoin rally gains from cooler PPI and Fed rate-cut odds; read analysis and expert quotes. Stay informed — read more.

What is driving Bitcoin’s rally to a 19-day high?

Bitcoin rally is being driven by a mix of factors: August’s unexpected 0.1% drop in the U.S. Producer Price Index, reduced profit-taking on-chain, and rising market odds of a Fed rate cut. These elements increased risk appetite and supported short-term buying that pushed BTC above recent consolidation ranges.

How did the August Producer Price Index affect the market?

The August PPI fell 0.1%, the first monthly decline since April, led by lower unprocessed goods prices such as crude petroleum and easing service costs. Markets interpreted this as disinflationary, increasing the likelihood of a September rate cut and prompting traders to re-price rate expectations, which benefitted risk assets like Bitcoin.

Why is reduced profit-taking important for Bitcoin’s price?

On-chain metrics show selling pressure tied to profit-taking has waned, which removes a primary supply-side constraint during rallies. With fewer long-term holders realizing gains, upward momentum can persist longer, giving ETFs and fresh inflows room to lift price without immediate countervailing sell pressure.

How are experts interpreting the move?

Market researchers cited by news reports say the combination of lower-than-expected PPI and weak jobs growth increases the probability of Fed easing, which supports risk assets. Julio Moreno (head of research, CryptoQuant) and Sean Dawson (head of research, Derive) both link recent BTC strength to rising rate-cut expectations and diminished selling pressure. Michael Novogratz (Galaxy Digital) anticipates further gains later in the year as the Fed begins a cutting cycle.

When might rate cuts influence Bitcoin further?

Short-term: CME FedWatch shows a high probability of a 25 basis point cut at the next FOMC meeting, which is priced into markets already. Medium-term: if cuts commence, lower yields and easier liquidity conditions historically increase flows into risk assets, potentially accelerating ETF inflows and supporting new highs for Bitcoin.

Frequently Asked Questions

Will the Fed’s expected rate cut guarantee higher Bitcoin prices?

Not guaranteed. A Fed rate cut increases liquidity and can boost risk assets, but other variables—macro growth, geopolitics, and regulatory news—also affect BTC. History shows cuts often coincide with stronger crypto performance, but outcomes vary.

How reliable is on-chain data for assessing selling pressure?

On-chain data is a timely gauge of holder behavior and exchange flows, useful for measuring profit-taking and supply dynamics. It should be combined with macro indicators and order-book data for robust analysis.

Key Takeaways

• Macro catalyst: August PPI fell 0.1%, helping push rate-cut probability higher.
• Supply dynamics: On-chain metrics show reduced profit-taking, lowering immediate selling pressure.
• Market outlook: Analysts expect renewed ETF inflows and potential further gains toward year-end if cuts begin.

Conclusion

The current Bitcoin rally is grounded in cooler producer inflation, diminished profit-taking, and strong market odds of a Fed rate cut. Combined, these factors have elevated BTC above a recent consolidation and set the stage for possible further gains. Monitor inflation prints, on-chain selling metrics, and ETFs for signals on the next leg higher.

Published by COINOTAG — Updated: 2025-09-11