Bitcoin Tops $79,000 as CPI Pushes Fed Hike Odds Toward 90%
Bitcoin held above $79,000 on Friday even as U.S. inflation data pushed expectations for a Federal Reserve rate hike to roughly 90%.
Summary:
- Bitcoin trades above $79,000 as crypto rallies despite Fed hike odds approaching 90%.
- Ethereum jumps nearly 8% to $2,621 as total crypto market cap reaches $2.70 trillion.
- Crypto open interest climbs to $425.24 billion, raising the stakes for the September 16 Fed decision.
August CPI left annual inflation at 3.4%, while a firmer monthly core reading added to evidence that price pressures have not disappeared. For crypto, the September 16 decision now carries an unusual setup: traders have largely moved toward expecting a hike, while Bitcoin and several major altcoins have resisted a broader selloff.
Core inflation falls to 2.4%, but monthly pressure persists
The U.S. Consumer Price Index rose 0.4% in August, its largest monthly increase in three months, while annual inflation remained at 3.4%, according to the Bureau of Labor Statistics.
Energy played a large role. Gasoline prices increased 3.9% during the month and accounted for more than one-third of the overall CPI advance.
Core CPI provided the more complicated signal. Excluding food and energy, prices increased 0.3% month over month, above the 0.2% consensus estimate, even as the annual core rate eased from 2.5% to 2.4%, its lowest since March 2021.
That leaves policymakers looking at two different inflation speeds. The year-over-year core trend is improving, but the latest monthly pace is not yet consistent with an uninterrupted return toward the Fed’s 2% target.
Producer prices have reinforced the near-term concern. August PPI rose 0.4% from July and 5.4% year over year, while higher energy costs remain a potential source of additional headline inflation.
Bitcoin tops $79,000 as crypto rally broadens
Crypto prices strengthened after the August CPI release even as markets moved closer to pricing a Federal Reserve rate hike. Total cryptocurrency market capitalization rose 2.83% to $2.70 trillion, while the Fear & Greed Index reached 71, signaling Greed.
- Bitcoin (BTC): $79,093.03 | 24h: +2.55% | 7d: -0.45%
- Ethereum (ETH): $2,621.87 | 24h: +7.75% | 7d: +6.85%
- BNB: $737.37 | 24h: +3.85% | 7d: +3.00%
- XRP: $1.41 | 24h: +3.63% | 7d: +0.16%
- Solana (SOL): $104.61 | 24h: +4.89% | 7d: +2.95%
- Dogecoin (DOGE): $0.08728 | 24h: +4.03% | 7d: +2.34%
- Hyperliquid (HYPE): $83.22 | 24h: +2.64% | 7d: -2.39%
- Zcash (ZEC): $1,212.06 | 24h: +3.12% | 7d: +22.46%
Ethereum led the major assets with a gain of nearly 8%, while Bitcoin moved above $79,000 and reduced its seven-day loss to less than 0.5%. Solana, BNB, XRP and Dogecoin also advanced, making the move considerably broader than the earlier rebound.
The timing is notable. Crypto is rallying while traders simultaneously price a high probability of tighter Fed policy and Treasury yields remain elevated. That divergence suggests the expected September hike has not been enough on its own to trigger broad risk reduction.
The more demanding test comes from what happens to rates after the Fed decision. If Treasury yields extend their rise as markets price additional tightening, Bitcoin’s move toward $80,000 would face a different macro backdrop. If yields stabilize despite a 25-basis-point hike, the current rally would have absorbed much of the immediate September policy repricing.
A 25-basis-point hike is increasingly priced in
Expectations for September have shifted rapidly.
Markets initially assigned roughly a 52% probability to a quarter-point increase following the August employment report. That moved above 60%, then toward 70% after producer-price data. Following Friday’s CPI report, market pricing shown in the latest data puts the probability near 90%.
A quarter-point move would raise the federal funds target range from 3.50%-3.75% to 3.75%-4.00%.
For Bitcoin, the progression in those probabilities is crucial. Markets have already had several sessions to adjust bond yields, currencies and risk positions before the Fed actually acts. A hike that arrives with roughly 90% probability attached to it is very different from an unexpected tightening decision.
READ MORE: Bitcoin and Ethereum Face Key Tests as BTC Demand Recovers
The September meeting therefore has three distinct market outcomes:
- 25 bp hike with restrained guidance: If the Fed raises rates but sets a high threshold for another increase, part of the hawkish positioning accumulated before the meeting could unwind.
- 25 bp hike with further tightening signaled: A higher expected path for rates would be the tougher outcome for crypto, particularly if Treasury yields rise with it.
- No hike: If probabilities remain near current levels, holding rates steady would deliver the largest immediate surprise and force a rapid reassessment across rates and risk markets.
The key variable is not simply the new policy rate. It is where investors think that rate will be several meetings later.
$425.24 billion in open interest raises the leverage risk
Crypto derivatives expanded alongside the market rally, leaving substantial leveraged exposure in place ahead of the September 16 Fed decision.
According to CoinMarketCap, total open interest reached approximately $425.24 billion, up 0.4%, while 24-hour derivatives volume stood at $800.45 billion. Total liquidations climbed to roughly $843.78 million.
Liquidations remained heavily concentrated among bullish positions:
- Long liquidations: $654.94 million
- Short liquidations: $188.84 million
- Total liquidations: $843.78 million
Long positions accounted for roughly 78% of all liquidations, even as Bitcoin advanced above $79,000. That combination of rising prices, higher open interest and substantial long liquidations points to an active repositioning rather than a straightforward build-up of bullish leverage.
The higher open-interest base also increases sensitivity to the Fed decision. A renewed rise in Treasury yields accompanied by a Bitcoin reversal could force another reduction in leveraged exposure, while stable yields would give the market more room to absorb the September policy move without the same liquidation pressure.
Why Treasury yields may give the first signal
The bond market should provide a cleaner read on the September decision than the headline rate change alone.
The 10-year Treasury yield has approached 5%, reflecting higher inflation risk, energy prices and expectations that monetary policy may remain restrictive. If yields push further above current levels after the Fed meeting, investors would effectively be saying that the policy announcement increased the expected cost of money beyond September.
That matters for crypto because the current price action has developed alongside rising rates rather than after them. Bitcoin near $77,800 shows that a substantial portion of the initial repricing has been absorbed. The next test is whether that resilience survives another leg higher in yields.
The dollar provides a second cross-check. Rising Treasury yields accompanied by a stronger dollar would represent a broader tightening of financial conditions, a more difficult combination for leveraged crypto positions than a rate hike followed by stable bond markets.
What traders should watch on September 16
Three indicators can distinguish a routine Fed hike from a more consequential macro shift.
First is the two-year Treasury yield, which is particularly sensitive to expectations for the policy rate. A sharp increase after the announcement would indicate that traders are adding future tightening rather than simply absorbing September’s move.
Second is crypto leverage. With open interest already at $415.66 billion, falling BTC prices accompanied by rapidly declining open interest would point to forced deleveraging rather than a simple rotation between tokens.
Third is the Fed’s updated policy guidance. Economists have remained less convinced about tightening than futures traders, leaving room for either side of that disagreement to adjust once policymakers provide a clearer rate path.
Bitcoin’s current resilience makes those signals more useful than the September hike in isolation. If BTC holds around $77,000-$78,000 while Treasury yields stabilize and leverage declines in an orderly way, the market would have absorbed a major change in rate expectations without a broad unwind. Rising yields, a stronger dollar and another wave of long liquidations would produce a very different test for the crypto market.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Zdravkov
Reporter at CoinsPress
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
