- US CPI inflation rises 2.9% YoY as markets bet on a 25 bps Fed rate cut.
- Bitcoin dips below 114K before rebounding as CPI data matches expectations.
- Jobless claims hit 263K highest since 2021 strengthening case for Fed easing.
The August Consumer Price Index (CPI) data, released by the Bureau of Labor Statistics, indicated that inflation increased to 2.9% annually. Monthly CPI growth was 0.4%, higher than the projected 0.3%. The core CPI, which excludes the volatile prices of food and energy, also met expectations, rising 3.1% year-over-year and 0.3% month-over-month. This persistent inflationary pressure could encourage the Federal Reserve to consider lowering interest rates at its next policy meeting.
Bitcoin Price Reaction
Bitcoin dropped sharply After the publication of the CPI data, temporarily testing the bottom of the mark of $114,000. The cryptocurrency’s fluctuation reflected the market’s reaction to the inflation figures. Bitcoin however quickly recovered and once again rose above the crucial mark of $114,000.
Bitcoin has important Support at $113K, and $114K is already conquered, which proves the presence of bullishness. The breakout levels to monitor are $115K and $117K; the pullback would challenge the levels as a support. Should these hold, the uptrend could extend to $115K and allow the potential of a blowout to its all-time highs or beyond,
$BTC has reclaimed a very crucial level.
The $113.5K level which acted as a resistance has now been flipped into support.
Now the next key level for Bitcoin is to reclaim $117K level, and a new ATH will be confirmed. pic.twitter.com/3QdrCtH4ho
— BitBull (@AkaBull_) September 11, 2025
According to TradingView data, this recovery transpired as the market actors digested the greater economic effects. The CPI statistics, together with a declining Producer Price Index (PPI) confirm the argument in favor of a 25 point reduction in the rate by the Federal Reserve.
Recent inflation figures, even though they remain above the Fed target, are not reflective of an emergency tightening. The move increases investor confidence especially on risk assets such as Bitcoin. In case the Federal Reserve decides to cut the rate, then there would be likely to enhance market liquidity and foster risk-on in all financial markets.
Market Outlook Following CPI and Job Data
The recent state of the jobless claims was also an indicator of a weaker labor market, together with the CPI data. There was a massive early jobless claim of 263,000 due to a high number compared to the anticipated 235,000. This is the largest jobless claims total in the month of October 2021. Such figures also indicate that the labor market is cooling down, a phenomenon that will justify the Fed to lower the rates.
According to the CME FedWatch data, it is apparent that the markets have now priced an increase in the probability of a 25 basis point rate cut at the Fed’s next meeting to 90.9% probability. The probability of a 50 basis point reduction has reduced considerably, and it is currently 9.1%. Experts note that stable inflation, combined with signs of a cooling labor market, places the Federal Reserve in a challenging position as it seeks to balance economic support with inflation control.
Bitcoin’s Bullish Momentum and Future Prospects
Bitcoin has rebounded to more than $114,000 which is an indication of investor confidence, and this move will be backed by speculations of a positive economic climate and possible rate cut by the Fed. The next possible level of resistance in Bitcoin in the short term is the level of $115,000.
Nevertheless, the market is sensitive and unforeseen fluctuations, including the change in the position of Fed or increasing inflation, might cause pullbacks. Rebates to $112,000 or $109,000 should be monitored by traders, but the trend is on the bullish side.
