🚀 Crypto Soars as U.S. CPI Data Sparks September Rate Cut Frenzy

Markets roar back as inflation cools—traders pile into Bitcoin and altcoins ahead of expected Fed pivot.

The Fed's favorite excuse just evaporated

With CPI finally bending, Powell & Co. have cover to slash rates—and crypto's front-running the party. ETH, SOL, and memecoins rip as liquidity hopes surge.

Wall Street's playing catch-up (again)

While traditional finance debates 'soft landing' scenarios, decentralized markets already priced in the dovish turn. Classic.

Greed index flashing—but this time might be different

Retail FOMO meets institutional accumulation. Just don't mention last time everyone expected 'transitory' inflation.

Bonus cynicism: *Somewhere in Connecticut, a hedge fund manager is explaining why this CPI print 'changes everything' after shorting BTC at $60k.*

TLDR

• The U.S. CPI inflation rate was 2.7% year over year, matching last month’s figure but below the expected 2.8%.
• Monthly inflation stood at 0.2 %which was lower than the previous reading of 0.3%.
• The crypto market rose sharply after the CPI release, with the total market cap increasing from $3.9 trillion to $3.94 trillion.
• Bitcoin and Ethereum led the rally, with Ethereum breaking above $4,400 from an intraday low of $4,172.
• CME FedWatch data showed an 82.4% chance of a 25-basis-point Fed rate cut in September.

The U.S. CPI inflation data recorded 2.7% year-on-year in July, coming in lower than the expected 2.8% and unchanged from last month. Monthly inflation stood at 0.2%, below the prior reading of 0.3%. This data sparked a sharp rise in the crypto market, which had fallen before the release.

Analysts noted that inflation results increased the likelihood of a September Federal Reserve rate cut. The CME FedWatch tool showed an 82.4% probability of a 25-basis-point cut. Only 17.6% of traders expected rates to remain steady.

Federal Reserve members have offered mixed signals about policy moves. Michelle Bowman recently urged support for a September cut and indicated she favored three cuts this year. However, Jeff Schmid stressed keeping rates steady to manage inflation risks.

Crypto market rallies after upbeat CPI data

Bitcoin surged following the CPI announcement, benefiting from increased market optimism over potential monetary easing. Prices climbed in tandem with broader crypto market sentiment, which improved immediately after the inflation figures were published. Trading data showed Bitcoin holding gains through the trading session.

The total crypto market capitalization ROSE from $3.9 trillion to $3.94 trillion. This marked a rapid shift from pre-release weakness to strong momentum. Market participants viewed the data as a confirmation of dovish policy expectations.

Rate cuts often inject liquidity into financial markets, which can fuel risk-on sentiment and asset rallies. Analysts said Bitcoin’s strong rebound reflected renewed demand for digital assets. The CPI report aligned with forecasts that lower inflation WOULD boost the crypto market.

Ethereum Breaks Key Resistance Levels

Ethereum price broke above $4,400 from an intraday low of $4,172 after the CPI data hit the wires. This rally occurred alongside gains in other major altcoins, reflecting improved sentiment across the crypto market. Technical analysts noted the MOVE pushed ETH beyond a key resistance zone.

Traders highlighted Ethereum’s strong correlation with broader market trends during macroeconomic events. As inflation data came in lower than expected, buying pressure intensified. This price movement reinforced market expectations for further upside if monetary easing occurs.

The crypto market’s reaction suggested traders were positioned for an inflation reading at 2.8% or below. With the figure at 2.7%, bullish momentum accelerated. Ethereum’s rally contributed significantly to the overall market cap increase.

Altcoins Join the Rally

XRP and solana also posted notable gains after the inflation report. Their upward moves reflected a widespread lift in the crypto market. Strong volume accompanied the price action, indicating substantial market participation.

Rising Optimism over a September rate cut supported the altcoin surge. Traders priced in the likelihood of easier monetary conditions. Analysts observed that the market responded decisively to the combination of low inflation and dovish policy signals.

The CPI data provided the boost needed for the crypto market to reverse earlier losses. As September approaches, traders will watch for additional policy cues. The probability of a rate cut remains a key driver for market direction.