Key Takeaways:
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Bitcoin broke $ 114,000 because the data showed PPI inflation that cooled sharply in August.
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Entrepreneurs believe that data can push the Federal Reserve to cure rates in September.
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Long -term onchain trends show short -term excitement that takes place after deductions in the Fed rate, then longer upside down.
Bitcoin (Btc) climbed above $ 114,000 for the first time since August 24, extending its recent recovery as US inflation data has come to cooler than expected. The step complies with the release of August the producer price index (PPI), which drops to 2.6% year-year compared to forecasts of 3.3%. The Core PPI, which washed food and energy, fell to 2.8%, which is less than 3.5% agreed.
On a monthly basis, the PPI became negative, marked only a second backward from March 2024, according to Kobeissi Newsletter. Increasing Dovish tone, inflation numbers from July were also modified lower, with a PPI headline that adjusted 3.1% from 3.4% and primary PPI up to 3.4% from 3.7%. In addition to the historical reciprocation of US jobs data earlier this week, which deleted 911,000 jobs from the last 12 months, markets are looking at interest rate cuts closer.
Market analyst skew mentioned Manufacturer’s inflation trends are often caught in consumer price indexes (CPI) for one to three months. This means that adhesive CPI readings can still appear in short running, even with wider trajectory points in cooling inflation in Q4. As the PPI slows down, the fence flows can continue until the CPI confirms the easing trend.
Related: Bitcoin must press $ 104K to repeat the previous Bull Market Dips: Research
Bitcoin’s historical reaction to fed rate cuts
With reductions in the interest rate of the Federal Reserve that seem likely, the history of Bitcoin shows a consistent pattern of excitement followed by the reversal. Two onchain metrics, market value in realized value (MVRV) and whale ratio, have provided additional light.
The MVRV compares the capitalization of the Bitcoin market to realized capitalization (the combined -value of which coins last move). When the MVRV hover near 1, the BTC is usually undervalued, and levels close to 3-4 suggest extra heat values.
Meanwhile, the whale ratio measures part of the large transactions of the holder as an exchange flow, showing when the whales send coins to sell or return them for storage.
Data from cryptoquant Highlights That in March 2020, interest rate cuts sent the MVRV to collapse towards 1 while panic was wiped out of the increased speculation of investors, while the ratio of the whale sprouted into heavy whale sale.
As the liquidity flooded, the MVRV was rebounding, and the whales moved to accumulation, which fuel the 2020–2021 Bull Run of Bitcoin. A similar pattern repeated in the late 2024 easing cycle, when both indicators reflect short-term sale before stabilizing another rally.
If the rhymes of history, the Fed easing in 2025 could re -bring preliminary volatility, but generally provides a liquid rear for Bitcoin to approach new highs.
This article does not contain investment advice or recommendations. Every transfer of investment and trading involves risk, and readers should conduct their own research when deciding.
