- Bitcoin and other major cryptocurrencies experienced significant price swings as traders anticipated new U.S. inflation data and potential Federal Reserve interest rate changes.
- The crypto market surged after U.S. inflation figures gave the Federal Reserve a possible path to lower interest rates in September, with market odds showing a 96% chance of a 0.25% rate cut.
- Donald Trump publicly urged the Fed to lower rates, criticizing Chair Jerome Powell and hinting at legal action over Fed headquarters renovations.
- Major coins including Ethereum, Solana, XRP, and Dogecoin outperformed Bitcoin, helping the total cryptocurrency market reach an all-time high above $4.1 trillion.
- Analysts see potential for range-bound trading in the short term, with possible renewed gains if a rate cut and trade policy clarity occur in the coming weeks.
Bitcoin and other cryptocurrencies saw sharp fluctuations this week as investors waited for new U.S. inflation data and possible interest rate changes from the Federal Reserve that could impact financial markets.
Bitcoin’s price neared its all-time high of $123,000 before retreating, despite a high-profile statement from U.S. President Donald Trump. Trump called for lower U.S. interest rates, adding pressure on the Fed ahead of its next policy decision. According to the CME FedWatch tool, markets now estimate a 96% chance that the Fed will lower its federal funds rate by 0.25% in September. The recent inflation report, indicating slowing price growth, spurred these expectations and lifted crypto prices overall.
U.S. president Donald Trump, who has been in a war of words with Fed chair Jerome Powell for months, posted to his Truth Social account that the Fed “must now lower the rate,” lifting crypto prices and stock markets as traders bet on continued U.S. economic improvements and lower rates speeding up the flow of money. Trump also stated he is considering suing Powell over the management of renovations at the Fed’s headquarters, a plan later confirmed by White House officials.
Current data from Coingecko shows Bitcoin is trading near $121,000, a 2% increase in the last day. Ethereum has climbed by 10% to just under its record high of about $5,000. Solana is up 15%, while XRP and Dogecoin have also posted strong gains, 5% and 12% respectively. The total market capitalization of all cryptocurrencies reached an all-time high of more than $4.1 trillion.
“There seems to be no stopping the ether bull run, with the cryptocurrency outpacing bitcoin and trading in near 3 3/4 year highs following an on-target U.S. inflation print which reassured investors,” said Axel Rudolph, senior technical analyst at IG. Another analyst, Nic Puckrin, noted, “The current outlook for bitcoin and the broader crypto market over the next six to eight weeks is one of range-bound trading, with limited upside expected in the short term.”
The Federal Reserve paused its cycle of rate cuts recently, citing concerns that Trump’s trade policies could contribute to higher inflation. The July Consumer Price Index (CPI) report, due at 8:30am ET, is expected to show a 2.8% year-over-year rise, slightly higher than June. Alex Kuptsikevich of FxPro remarked, “There are fears of a repeat of the situation we saw in July, when a promising breakthrough turned into an exhausting sideways movement and rattled nerves with a decline in the first days of August. We attribute the bitcoin pullback to the cautious mood of major players ahead of U.S. inflation data…”
Looking ahead, traders await signals from the Fed’s September meeting and developments in global trade policy. Some experts believe clear decisions on both could boost crypto markets and push Bitcoin above previous highs. For now, the outlook remains cautious as the market awaits the next moves on rates and macroeconomic policy.
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