Bitcoin Rises Above $111K as Soft CPI Boosts Fed Rate Cut Hopes

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• U.S. CPI came in softer at 3%, below expectations.
  
• Bitcoin surged above $111K on renewed Fed rate cut hopes.
  
• Markets now expect two 25 bps cuts before year-end.

The latest U.S. Consumer Price Index (CPI) data came in below forecasts, reigniting optimism across risk markets — and Bitcoin was quick to respond. According to the Bureau of Labor Statistics, September’s CPI rose 3% year-over-year, slightly under the 3.1% expected. On a monthly basis, inflation increased 0.3%, also lower than the 0.4% projection.

Core CPI, which strips out food and energy, climbed 3% YoY and 0.2% MoM, suggesting inflation remains steady but not accelerating. The softer print indicates that price pressures are easing, giving the Federal Reserve more room to maneuver on monetary policy.

Bitcoin Rallies Above $111,000 After Data Release

Following the report, Bitcoin surged past $111,000, according to TradingView data. The move came as traders grew confident that the Fed will continue its path toward rate cuts — potentially as soon as the upcoming FOMC meeting next week.

The broader crypto market also turned green, building on early momentum from reports that former President Donald Trump may meet China’s President Xi Jinping, a development that lifted risk appetite globally.

Market Prices in Two More Fed Cuts

According to CME FedWatch, markets are now pricing in a 98.9% probability of a 25 basis point rate cut next week. Expectations for another cut in December also climbed, with odds standing at 94.5%.

Also Read: Critical CPI Week: Bitcoin Faces Breakout as Fed Rate Cut Looms

While traders largely expect next week’s move to be priced in, analysts believe a softer policy stance through year-end could sustain Bitcoin’s upward momentum. The leading cryptocurrency has already hit a record high above $120,000 this month, largely driven by speculation of easing financial conditions.

Outlook: Rate Cuts Could Reinforce Bitcoin’s Bullish Trend

With inflation cooling and rate cuts likely, investors are viewing Bitcoin as a strong hedge against long-term monetary expansion. As markets digest the Fed’s next steps, BTC could remain one of the key beneficiaries of a looser policy outlook heading into year-end.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.