Bitcoin’s positive momentum at the beginning of the week continued into Thursday, reaching a peak not seen in 19 days. Analysts attribute this rise to slightly lower inflation figures, which are seen as favorable ahead of the Federal Reserve’s decision on interest rates scheduled for September 17.
According to data from CoinGecko, Bitcoin has increased by 1.5% over the last day, building on Wednesday’s gains that broke a two-week period of stagnation. Currently, Bitcoin is trading at $115,680 after briefly surpassing $116,300 earlier in today’s trading session.
Julio Moreno, head of research at CryptoQuant, stated in an interview with Decrypt that “the recent price movements can be linked to rising expectations regarding an interest rate cut by the U.S. Fed during their upcoming meeting following lower-than-anticipated producer inflation data.”
The Producer Price Index (PPI) for August unexpectedly decreased by 0.1%, contrasting sharply with July’s significant increase that triggered a market sell-off.
This decline marks the first drop in PPI since April and is attributed to reduced prices for raw materials like crude oil and declining service costs.
Sean Dawson from Derive noted to Decrypt that “the markets are reacting positively as it now seems almost certain there will be a rate cut next week.” He added that “the Fed appears ready to activate monetary easing measures especially given weak job growth across the United States.”
CME’s FedWatch tool indicates there is a 92.7% probability of a 25 basis point reduction in rates while there remains only about a 7.3% chance for a half-point cut.
Michael Novogratz, founder and CEO of Galaxy Digital, expressed optimism during his Thursday interview with CNBC: “We can expect another significant rally towards year-end as the Fed embarks on its cutting cycle.”
Looking ahead, Moreno remains optimistic due to diminishing downward pressure on prices; he notes that selling pressure from profit-taking appears exhausted based on blockchain data.
Dawson shares this positive outlook and anticipates Bitcoin will reach new heights soon thanks to increasing inflows into ETFs.
While Bitcoin has reached its highest level in nearly three weeks, major altcoins such as Ethereum, XRP, and Solana are experiencing modest single-digit increases. In contrast though Dogecoin and Hyperliquid have surged significantly over the past day with gains of 25% and 23%, respectively.