Bitcoin continued its ascent, surpassing $114,000, a development prompted by the release of US inflation data for August.
Bitcoin's Growth Amid Inflation Data
Bitcoin ([BTC](https://www.tradingview.com/symbols/BTCUSDT/)) exceeded $114,000, paving the way for a recovery after recent volatility. This surge followed the release of the Producer Price Index (PPI) data for August, which dropped to 2.6% year-over-year, falling short of expectations of 3.3%. Core PPI, excluding food and energy, slid to 2.8% from 3.5%.
Historical Reaction of Bitcoin to Fed Rate Cuts
With the likelihood of Federal Reserve rate cuts on the horizon, Bitcoin's history displays a consistent pattern: volatility followed by an upward trend. Two key metrics, Market Value to Realized Value (MVRV) and Whale Ratio, help illuminate this dynamic. MVRV compares Bitcoin's market capitalization to its realized capitalization.
Long-Term Trends and Prospects for Bitcoin
Data indicates that in March 2020, rate cuts led to a sharp decline in MVRV and an increase in Whale Ratio amid substantial selling. However, after liquidity began to flow into the market, MVRV rebounded, leading to a new Bitcoin rally. A similar scenario could repeat itself in 2025.
Bitcoin's rise above $114,000 highlights how economic data can impact the cryptocurrency market. Long-term expectations remain positive despite short-term volatility.
