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Bitcoin spikes to a 19-day high amid easing inflation data and rate-cut bets
Bitcoin climbed to just above $116,300 in intraday trade, marking a 19-day high as macroeconomic signals and renewed ETF demand lifted market sentiment. The flagship cryptocurrency traded around $115,680 at the time of reporting, extending gains that ended a two-week consolidation period and reversing earlier weakness.
Macro tailwinds: PPI dip fuels expectations of a Fed rate cut
Investors reacted positively after the U.S. Producer Price Index (PPI) for August unexpectedly dropped by 0.1 percent, the first monthly decline since April. The reading reflected lower costs for unprocessed goods, including crude petroleum, and a moderation in some service sectors. Market participants interpreted the data as an additional signal that inflation pressures are easing, which in turn raised the odds of a Federal Reserve interest-rate reduction at the September meeting.
On-chain research groups and options analysts told reporters that lower-than-expected PPI figures helped cement expectations of a 25 basis-point rate cut, with some market tools pricing cut probabilities at above 90 percent for the Fed's next move. Traders view a potential easing cycle as a tailwind for risk assets including cryptocurrencies, since lower policy rates typically reduce the opportunity cost of holding volatile assets.
ETF inflows and diminishing selling pressure amplify the rally
Spot Bitcoin exchange-traded funds in the U.S. recorded meaningful capital inflows, with one-day flows hitting roughly $757 million — an eight-week high — and September accumulations reaching about $1.39 billion. That wave of demand has coincided with reduced on-chain signs of profit-taking. Analytics indicate that wallets historically most likely to sell into rallies have shown waning distribution activity, suggesting that immediate selling pressure may be exhausted.
Market analysts say this combination of ETF demand and declining supply pressure helped lift Bitcoin from a Tuesday low near $110,700 back above $114,000 before the intra-session push to $116K. Futures and derivatives desks also noted heightened speculative activity across the crypto complex, though flows have been uneven between spot and futures markets.
Market positioning: futures flow versus ETF rotation
A divergence emerged this week between derivatives traders and ETF investors. Aggregate 24-hour futures volume for Ethereum outpaced Bitcoin's futures volume, indicating strong speculative interest in the second-largest token. At the same time, institutional and retail ETF flows have favored Bitcoin, channeling fresh liquidity into spot markets and supporting the price.
Traders flagged a rotation where ETF inflows provide steady, long-duration demand while futures activity drives short-term volatility. This dynamic helps explain why Bitcoin has seen relative strength in price while some altcoins remain muted.
Expert outlooks: optimism but watch key catalysts
Market researchers and institutional investors expressed optimism about Bitcoin's trajectory heading into the final quarter of the year. On-chain analysts highlighted the decline in realized profit-taking and the concentration of coins in longer-term holder wallets as constructive signs. Options and macro strategists expect a period of higher volatility but remain bullish on the prospects for renewed upside, particularly if the Fed signals the start of a cutting cycle.
Several industry figures predicted a potential 'big surge' toward new highs by year-end should the Fed follow through with rate reductions and ETF flows remain robust. Such a scenario would likely draw additional capital from both traditional investors seeking yield and crypto-native traders chasing performance.
Altcoins: selective gains amid Bitcoin leadership
While Bitcoin led the gains, many large-cap altcoins posted modest single-digit rises. Ethereum, XRP, and Solana traded cautiously, though derivatives desks reported elevated interest in ETH futures. Smaller-cap and meme tokens showed episodic strength: Dogecoin rallied about 25 percent over 24 hours, and Hyperliquid advanced roughly 23 percent in the same period, underscoring how liquidity rotations and speculative bets can produce outsized moves outside the top market-cap assets.
What traders should watch next
Key catalysts to monitor include the Fed's September decision, incoming U.S. macro prints such as jobs data, and continued ETF flow reports. If rate-cut expectations firm and inflows persist, positioning could become increasingly bullish for Bitcoin. Conversely, any surprise upside in inflation or weaker-than-expected fund flows could reintroduce selling pressure and volatility.
For investors, the immediate environment looks supportive for Bitcoin, with on-chain indicators showing subdued profit-taking and institutional demand via ETFs providing structural support. Traders should remain attentive to liquidity conditions and risk management, as rapid price moves can occur when speculative futures volumes spike or macro surprises emerge.
Overall, Bitcoin's brief stretch above $116K reflects a mix of macro relief, strong ETF demand, and on-chain dynamics that have reduced acute selling pressure. Whether that momentum sustains will depend on upcoming Fed signals and the persistence of capital flows into spot Bitcoin products.
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