Bitcoin News Today: Bitcoin Surges Past $119K as U.S. CPI Eases to 2.7% Spurring Rate Cut Hopes

The latest U.S. inflation data has injected renewed optimism into the cryptocurrency market, with Bitcoin showing a clear upward trajectory in response to the softer Consumer Price Index (CPI) reading. The CPI came in at 2.7% year-over-year, slightly below the expected 2.8%, reinforcing expectations that the Federal Reserve may begin cutting interest rates by the end of the year, potentially as early as September [1]. This development has been broadly interpreted as a favorable signal for risk assets, including cryptocurrencies, with Bitcoin briefly surging above $119,000 immediately following the data release [1].

Analysts have outlined potential scenarios for Bitcoin’s near-term performance based on the possibility of a Fed rate cut. In a bullish scenario, a confirmed rate cut in September could push Bitcoin beyond the $120,000 resistance level, potentially leading to a move toward $125,000 by the end of Q4 2025. If no immediate action is taken, the cryptocurrency may consolidate between $116,000 and $120,000, while a bearish outcome—triggered by a resurgence in inflationary pressures or a hawkish pivot from the Fed—could see prices retreat to $112,000 [1]. The market is closely monitoring the upcoming FOMC meeting in mid-September, which is expected to provide a clearer direction for the Fed’s stance and influence short-term volatility [1].

Ethereum has also demonstrated resilience, trading near critical support levels above $4,000. If the narrative of rate cuts continues to gain momentum, Ethereum could see a push toward $4,500 in the coming weeks. Altcoins are expected to benefit from increased liquidity and renewed investor confidence should the Fed signal further easing measures [1].

Despite the positive short-term outlook, the broader macroeconomic environment remains cautiously optimistic. Core inflation remains elevated at 3.1%, slightly above estimates, indicating that the Fed may proceed with caution. This cautious approach could lead to short-term volatility, especially around key central bank communications [1].

Market sentiment has shifted in favor of cryptocurrencies, with investors increasingly viewing them as strategic assets rather than speculative ones. The potential for a rate cut has already begun to influence positioning, with traders adjusting their strategies in anticipation of a more dovish monetary policy [1].

Source: [1] Crypto Market Outlook After US Inflation Data: Bitcoin Eyes $125K as CPI Hits 2.7% (https://cryptoticker.io/en/crypto-market-outlook-us-inflation-data-bitcoin-125k/)