Bitcoin May Hold Above $114,000 as August PPI Drop Boosts Fed Rate Cut Bets Ahead of CPI

• Bitcoin price rises 0.5% after August PPI drops 0.1%

• Core PPI climbed 0.3% month-over-month, pushing year-over-year core to 2.8%.

• Market expectations: CME FedWatch shows 88% pricing a 25bp cut; Crypto Fear & Greed moved from 70 to 49.

Bitcoin price edges higher after PPI drop; watch CPI and FOMC next week—stay informed with COINOTAG updates.

What is driving the Bitcoin price move?

Bitcoin price rose 0.5% after the Bureau of Labor Statistics reported the producer price index (PPI) fell 0.1% in August, lowering producer-side inflation pressure and increasing expectations of a Federal Reserve rate cut. Traders are now focused on CPI and the FOMC decision for confirmation.

How did the August PPI data affect crypto markets?

The PPI drop suggests manufacturers face less upward pricing pressure, which can ease expectations for tighter monetary policy. Core PPI, excluding food, energy and trade, however, rose 0.3% month-over-month—the fastest pace since March—lifting the year-over-year core rate to 2.8% and signaling persistent underlying inflation.

Short-term market response was mixed: Bitcoin and Ethereum saw modest gains while investors recalibrated Fed cut odds. Price action reflects sensitivity to macro data that influences the Federal Reserve’s policy path.

Why are traders watching CPI and the FOMC?

CPI focuses on consumer-facing inflation and often moves markets more than PPI. A lower-than-expected CPI tends to increase optimism for easing and can fuel rallies in risk assets like crypto. The Federal Open Markets Committee (FOMC) will use incoming inflation and jobs data to decide any rate adjustments, which typically trigger immediate volatility.

As of this writing, Bitcoin has gained about 0.5% in the past hour and is trading above $114,000. That places BTC roughly 2.3% higher than one week ago but about 5.7% below the price 30 days prior. Ethereum also rose modestly, gaining roughly 0.2% to trade near $4,382.10, according to price aggregator Coingecko (price aggregator mentioned as plain text).

Market sentiment on prediction markets owned by Dastan (parent company of a known crypto publisher) showed a swing toward optimism. Users on Myriad increasingly expect Bitcoin to remain above $105,000 through September; current polling indicates about 72% confidence among participants.

What are investors pricing for the Fed?

CME FedWatch (plain text) shows about 88% probability of a 25 basis point cut and 12% probability of a 50 basis point cut at the next FOMC meeting. This distribution suggests the market largely expects a modest easing move, which supports risk-on positioning if confirmed by CPI and payrolls data.

James Toledano, chief operating officer at Unity Wallet, said: “Lower-than-expected CPI often fuels optimism for easing and rallies crypto, while hotter data usually triggers pullbacks. Past patterns confirm the market’s sensitivity to inflation data as a gauge of monetary policy direction.”

Toledano also noted he’ll monitor the Crypto Fear & Greed Index to gauge trader positioning. The index moved from a greed reading of 70 last month to a neutral 49 as of this update.

Frequently Asked Questions

How much did core PPI rise and why does it matter?

Core PPI rose 0.3% month-over-month, its fastest pace since March, pushing the year-over-year core rate to 2.8%. That signals underlying price pressures even as headline goods inflation eases, and it could temper expectations for aggressive easing.

What does the Crypto Fear & Greed Index indicate now?

The index moved from a greed reading of 70 last month to a neutral 49 today, suggesting traders have reduced bullish conviction and are watching macro catalysts like CPI and the FOMC for clarity.

Key Takeaways

• PPI fall supports Fed easing bets: A 0.1% drop in headline PPI lowered producer inflation pressure and helped lift Bitcoin price.
• Watch CPI and FOMC: Tomorrow’s CPI and the next FOMC meeting are the decisive events for short-term crypto direction.
• Manage risk: Use market-implied Fed probabilities and sentiment indicators to size positions and set stops.

Conclusion

Bitcoin price modestly climbed after August’s PPI decline eased near-term inflation concerns, boosting Fed rate cut expectations. Markets now await CPI and the FOMC for confirmation, and traders should manage risk accordingly. COINOTAG will provide updates as CPI prints and FOMC guidance arrive.

Published by COINOTAG — updated 2025-09-10.