Bitcoin declined following August CPI data showing 3.4% year-over-year inflation, with markets awaiting Federal Reserve's anticipated 25 basis point rate hike.
Macro & Markets ·
August inflation data released Friday showed the Consumer Price Index holding steady at 3.4% annually while rising 0.4% month-over-month, both matching economist expectations. Core inflation, which excludes food and energy, cooled to 2.4% on an annual basis—the lowest since 2021—yet its monthly increase of 0.3% exceeded the 0.2% forecast. The mixed reading arrives five days before the Federal Reserve's mid-September meeting, with prediction markets placing odds of a 25-basis-point rate increase at 62% according to Polymarket pricing.
Bitcoin initially declined following the data release but subsequently recovered to trade near $79,000. The broader cryptocurrency market gained ground as total capitalization moved back toward $2.7 trillion and the Fear & Greed Index rose to 73, signaling greed sentiment. Ethereum led major assets with a 7.48% daily gain, while Solana climbed 4.53%.
Despite the rally's strength, institutional participation remained muted: spot Bitcoin exchange-traded funds recorded net outflows of roughly $330.5 million on the day. Open interest in crypto derivatives rose 1.52% to $429.99 billion, with liquidations across both long and short positions totaling $897.09 million during the volatile session.