Crypto Rallies as CPI Matches Forecasts, Bitcoin at $79K
Crypto markets climbed after August CPI matched headline forecasts and annual core inflation eased, sending Bitcoin back above $79,000 despite a firmer monthly core reading.
Key Takeaways
- CMC20 rose 3% between the snapshots.
- Bitcoin reclaimed $79,000 after the release.
- Ethereum rose 5%, leading large caps.
- Fed-hike odds rose after core CPI.
- A priced-in hike differs from further tightening.
Bitcoin Returned Above $79,000 as Gains Broadened
Two CoinMarketCap snapshots, taken when the CPI report was released and nearly 2 hours later, show a recovery across major assets – Bitcoin traded at $77,870 and Ethereum changed hands near $2,500.
Why Crypto Rallied Despite Firmer Core CPI
According to the U.S. Bureau of Labor Statistics, headline CPI rose 0.4% in August and annual inflation held at 3.4%, both matching expectations. Annual core inflation also came in at the expected 2.4%, down from 2.5% in July. Coindoo’s CPI report explains the result and its broader Fed implications.
Monthly core CPI was firmer, rising 0.3% instead of the 0.2% economists expected. But the report avoided an above-consensus headline CPI or annual core CPI result that could have pushed expectations toward further tightening after September. The reaction in Treasury yields and the dollar showed why that distinction mattered to crypto traders.
Higher Hike Odds Did Not Stop the Crypto Rally
The CME FedWatch Tool put the probability of a 25-basis-point increase at the September 16 meeting at 85% at the time of writing, leaving a 15% chance of no change. The repricing had already started before CPI: hike odds stood at 72% a day earlier, 59% one week earlier and 48% one month earlier. Reuters reported that the two-year Treasury yield rose 4.4 basis points after the release.
The apparent contradiction is the article’s main point. The hike became more likely, but the initial reaction did not signal expectations for a materially more restrictive path after it: the dollar was broadly flat and the 10-year Treasury yield fell after its first move higher. That gave risk assets room to rise even as the short end of the Treasury curve priced a greater chance of a September increase.
Altcoins Outpaced Bitcoin as the Rally Broadened
Ethereum’s 5% rise outpaced Bitcoin’s 2% gain, while XRP, Solana and Zcash also moved higher. That breadth suggests traders were willing to add risk after CPI instead of only moving into Bitcoin.
Hyperliquid’s HYPE token rose 2%, from $81.5 to $83.3, keeping it above the $77-$79 support area highlighted before CPI in Coindoo’s HYPE price analysis. Its rebound fits the broader macro move, while its token-specific breakout case still depends on reclaiming higher resistance.
What Would Challenge the CPI Rally?
Markets now see a September hike as likely, though not certain. The larger risk for crypto is a renewed rise in Treasury yields and the dollar that signals investors are pricing further tightening after it. Bitcoin holding above $79,000 while those indicators stabilize would support the initial CPI reaction; a renewed rise in both would challenge it.
Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP. Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem. To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem. His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.
