Bitcoin (BTC) Price Rallies Past $79K Following Inflation Data — What CPI Numbers Mean for Crypto

Key Highlights

• BTC surged beyond $79,000 following US core annual inflation data reaching a 66-month low of 2.4%
• Core CPI monthly reading of 0.3% exceeded the anticipated 0.2%, elevating Federal Reserve rate hike probability to 85%
• Spot Bitcoin ETFs experienced $13.29 million in withdrawals on September 11, continuing a four-day negative flow trend
• Ethereum-focused ETFs attracted $216 million in capital, with BlackRock’s ETHA capturing $149 million
• Technical analysts suggest a sustained break above $80,000 could trigger moves toward $82,000 and $84,000

The world’s largest cryptocurrency by market capitalization regained momentum on September 11, pushing past the $79,000 threshold after the release of US Consumer Price Index figures that largely aligned with market forecasts. This upward movement came after a temporary decline to $76,000, where renewed buying interest emerged.

Bitcoin (BTC) Price

The flagship digital asset was changing hands at $79,387.86, reflecting a 24-hour gain of 2.89%. The cryptocurrency sector as a whole advanced 2.36%, elevating the combined market valuation to $2.69 trillion.

The year-over-year core inflation metric decelerated to 2.4%, marking its weakest reading in 66 months. This metric, which strips out volatile food and energy components, is widely regarded as a more reliable indicator of persistent inflationary pressures.

Market analyst Crypto Patel had previously highlighted the significance of this data release on X, suggesting that a monthly core CPI figure below 0.2% would likely diminish Federal Reserve rate increase expectations and potentially propel Bitcoin prices higher. However, the actual 0.3% reading created a more complex scenario.

The headline inflation figure remained steady at 3.4% annually. Energy costs contributed significantly to the monthly increase, with gasoline prices advancing 3.9% in August and representing more than one-third of the overall monthly rise. The comprehensive energy index climbed 2.1% during the period, influenced by escalating oil prices connected to geopolitical tensions between the US and Iran.

Federal Reserve Rate Hike Expectations Intensify

While the annual figure showed cooling, the monthly core inflation increase of 0.3% surpassed the 0.2% market consensus. This development elevated the implied probability of a Federal Reserve rate increase at the September 16 policy meeting to 85%, climbing from 60% just seven days prior, based on CME Group’s FedWatch Tool data.

The monthly acceleration was attributed to persistent supercore services inflation, a measure that excludes both energy and housing costs. Fed policymaker Christopher Waller had previously indicated a preference for maintaining current rates if inflation demonstrated “some signs of disinflation.”

US 30-year Treasury yields surged to levels not witnessed since June 2004 before retreating to 5.309%. QCP Capital, a prominent trading firm, cautioned that elevated yields create obstacles for Bitcoin, characterizing the present conditions as “the worst mix for Bitcoin” — offering a competitive 5% risk-free return without accompanying economic expansion.

Exchange-Traded Fund Activity Reveals Diverging Trends

Bitcoin spot exchange-traded funds registered $13.29 million in net capital exits on September 11, representing the fourth consecutive session of negative flows, according to SoSoValue tracking. Morgan Stanley’s MSBT stood out as the sole exception with $3.76 million in net contributions.

Market observer Ted Pillows remarked on X that the day’s price appreciation was not supported by robust spot market demand, while increasing rate hike expectations add downward pressure. He observed that a decisive weekly settlement above $80,000 accompanied by substantial ETF inflows could propel BTC toward $85,000, though current market dynamics suggest a potential pullback is more probable.

Ethereum-focused ETFs presented a contrasting narrative, attracting $216 million in net capital. BlackRock’s ETHA dominated with $149 million in contributions. Ethereum itself surged more than 8% during the session, touching $2,640 for the first time in seven months.

From a technical perspective, Bitcoin’s MACD indicator displayed a bullish convergence with the histogram transitioning to positive territory at 13.86, although both MACD lines continue trading below the zero threshold. The Relative Strength Index registered 54.98, positioning BTC within neutral territory.

Aggregate Bitcoin ETF withdrawals reached $13.29 million on September 11, perpetuating a four-session outflow pattern as markets await the Federal Reserve’s September 16 policy announcement.

The post Bitcoin (BTC) Price Rallies Past $79K Following Inflation Data — What CPI Numbers Mean for Crypto appeared first on Blockonomi.