The recent decline in the Producer Price Index (PPI) in the U.S. prompted a rise in prices for Bitcoin and Ethereum, intensifying discussions about a potential Fed rate cut.
Market Reaction to PPI Drop
Following the release of the August PPI, which showed an unexpected 0.1% decrease, Bitcoin's price rose by 0.5%. This event is interpreted as a signal for easing monetary policy by the Fed. Furthermore, the PPI reduces inflationary pressure on producers, allowing the Fed to consider a rate cut.
Market Sentiment and Upcoming Events
The Crypto Fear & Greed Index fell from 70 to 49, indicating a decrease in optimism. Predictions show that 88% of investors expect a 25 basis point rate cut, which may drive volatility in the near future. The expected release of the Consumer Price Index (CPI) tomorrow may also impact the market.
Impact of Economic Data on Bitcoin and Ethereum
Bitcoin remains at $114,000, showing a 2.3% increase over the week, but a total decline of 5.7% over the month. Ethereum also reacted to the changes, reaching $4,382.10. It is crucial to note that U.S. economic data significantly influence crypto investors’ positioning, and the risk of significant fluctuations remains.
Thus, the decreased PPI strengthens hopes for a loose monetary policy, while the rise in core PPI reminds us that the fight against inflation is ongoing. Investors anticipate that further economic indicators will be key in the coming days.
