Recent U.S. inflation data has dampened hopes for a September rate cut by the Federal Reserve, impacting crypto markets. The Producer Price Index (PPI) rose by 0.9% in July, the largest increase in over three years, leading to a decline in prices for major cryptocurrencies like Bitcoin and Ethereum. Bitcoin dropped 4.2% to $118,200, while Ethereum fell by 3% to $4,570. Analysts express a cautious outlook for September but are optimistic about a potential rally towards the end of the year, powered by global liquidity from expected stimulus measures in China and a weakening U.S. dollar. This volatility follows a historical pattern where Bitcoin has experienced price dips in September, often followed by strong year-end recoveries if liquidity remains robust. Although the PPI shock has tempered aggressive rate-cut expectations, some believe the groundwork is set for a rebound as liquidity flows increase in the fourth quarter.

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