- Bitcoin hit $114K as markets await U.S. CPI data that could cement Fed rate cuts.
- Traders see a 92% chance of a 25 bps cut, with inflows into BTC and ETH ETFs surging.
- Geopolitical tensions add caution even as Bitcoin sets up for a potential new leg higher.
Bitcoin climbed 1.4% over the past 24 hours, trading around $114,000 for the first time since early August. The move comes as markets brace for the U.S. Consumer Price Index (CPI) release, a key report that could shape expectations for the Federal Reserve’s next rate decision. With inflation trends and labor data pointing toward easing conditions, traders are increasingly betting on a September rate cut.
Markets Price In Aggressive Fed Cuts
Polymarket bettors now assign a 79% chance of a 25 basis-point rate cut, while odds for a deeper 50 bps cut have surged to 18% from just 5.4% a week ago. CME’s FedWatch tool shows traders positioned for a 92% chance of a 25 bps cut and 8% for a bigger move. Such expectations are already boosting risk assets—spot Bitcoin and Ether ETFs saw $928 million in combined inflows yesterday, underscoring institutional appetite.
Risk-On Sentiment and Hedging Activity
While optimism is growing, analysts caution that stagflation risks remain. Wintermute’s Jake Ostrovskis pointed out that investors have rotated back into Bitcoin after Ether’s recent outperformance, with options data showing protective hedges on ETH. This dynamic has left the market “well hedged” heading into a possible rate-cut cycle. Gold’s strength adds another layer, with the BTC-to-gold ratio nearing resistance levels that historically marked cycle bottoms for crypto.
Geopolitical Tensions Add Uncertainty
Beyond macroeconomics, geopolitical risks continue to simmer. NATO scrambled jets after Russia violated Poland’s airspace this week, a move Polish Prime Minister Donald Tusk called the closest to open conflict since World War II. While Moscow denied involvement, the event has traders weighing both macro tailwinds and geopolitical headwinds in shaping Bitcoin’s next major move.
