Bitcoin Soars as CPI Data Ignites Rate Cut Frenzy - Here’s Why It Matters

Fed speculation sends crypto markets into overdrive

Bitcoin's pumping hard today as fresh CPI numbers have traders betting the Fed's about to flip dovish. When traditional finance gets shaky, digital gold starts looking mighty attractive.

The inflation data dropped softer than expected - and suddenly everyone's repositioning for potential rate cuts. That means cheaper money could soon flood into risk assets, with Bitcoin leading the charge as the ultimate hedge against monetary uncertainty.

While Wall Street analysts debate whether this is a temporary spike or the start of a new bull run, crypto natives are already stacking sats. After all, when the traditional financial system starts showing cracks, Bitcoin becomes the obvious escape hatch.

Just remember: the Fed giveth, and the Fed taketh away - but Bitcoin keeps marching to its own decentralized drumbeat. Maybe that's why it's outperforming every traditional asset class this year while bankers still can't decide if it's a currency, commodity, or threat to their entire business model.

Key Takeaways

The KOSPI made new all-time highs, and traders should watch out for increased trading volume over 5–7 days to signal that the next uptrend is underway.

Over the past two days, Bitcoin [BTC] saw a price surge of 3.53%, moving from $111.5k to $115.4k. On the 11th of September, the U.S. Bureau of Labor Statistics released the August 2025 CPI numbers.

The data proved to be the third time in 2025 that the Producer Price Index (PPI) figures pointed to outright deflation.

This news, combined with the heightened likelihood of rate cuts at the FOMC meeting next week, could set the stage for a longer-term bitcoin rally.

However, traders and investors need to be cautious of short-term volatility, especially in the hours immediately preceding and following the release of major news related to the U.S. job market and interest rate decisions.

Data shows that the BTC bull trend is likely to continue

Source: CryptoQuant

In a post on CryptoQuant Insights, analyst Arab Chain remarked that the Bitcoin surge in August was driven by increased trading volume and improved reserves.

The spot turnover intensity highlights the relationship between volume and exchange reserves.

High volume relative to reserves shows high turnover intensity, and that BTC is actively traded, and market confidence is high.

Low volume compared to reserves shows low turnover intensity, and that large amounts of Bitcoin were sitting idle on the exchange, indicating a lack of strong buying or selling pressure.

The analyst pointed out that a price drop below $110k alongside increased reserves and a decrease in turnover WOULD mean that sellers were taking control of the market.

However, a continuation upward is more likely than a sudden dump based on the data at hand.

Source: Alphractal on X

The Korea Composite Stock Price Index (KOSPI), South Korea’s main stock index, made a new all-time high, climbing past 2021 highs.

Each time the KOSPI made an ATH, Bitcoin was trading close to the all-time high of the cycle.

This does not mean Bitcoin holders should take profits and exit the market immediately. Rather, it was a sign that the bull run was nearing its end and likely had only a few more months left to finish.

Source: Axel Adler Jr on X

Crypto analyst Axel Adler Jr pointed out that the short-term holder realized price was at $108.1k, marking an important support level.

So long as the BTC price trades above this support, fears of a deep price reset would be unwarranted.