Bitcoin (CRYPTO: BTC) surged back to $79,000 Friday, swinging nearly 4% in two hours after August CPI data pushed September rate hike odds to 80% on Polymarket.
Ethereum (CRYPTO: ETH) raced to $2,600, up 7% on the day.
What the CPI Data Showed
Wall St Engine flagged on X that August headline CPI rose 0.4% month over month and 3.4% year over year, both in line with estimates.
Core CPI, however, came in at 0.3% monthly against a 0.2% estimate, its biggest monthly increase since April and the print that shifted market expectations sharply toward a hike.
As Benzinga reported, Polymarket traders now put the chance of a September 25-basis-point hike at roughly 80%, with over $113 million in volume on the contract.
CME FedWatch moved even more aggressively, showing hike odds at 91.6% Friday morning, up from 72.4% the prior day and just 59.4% a week ago.
The repricing happened fast: odds started the week near 50%, jumped to 61% on strong payrolls, climbed to 70% after Thursday’s hot PPI, and crossed 80% on Friday’s core CPI miss.
Why Bitcoin Recovered So Quickly
Bitcoin initially sold off on the hotter core reading before reversing sharply, with analyst Michaël van de Poppe posting on X that the dip swept a key level and the correction is over. “We’re about to see new highs for this one,” he wrote.
The recovery reflects a market that may have already priced in the rate hike. With the Fed’s decision locked in for September 16, traders appear more focused on what comes after, specifically whether Warsh signals further hikes or signals a pause.
Fed Governor Christopher Waller said last week he would consider a hike if inflation came in hot, and Friday’s 0.3% core print landed squarely on the hawkish side of that threshold.
BTC Price Analysis: Key Levels to Watch
Bitcoin reclaimed the 20-day EMA at $77,178 and trades near $79,058 Friday, with RSI recovering to 59.79 and pointing to renewed momentum without flashing overbought conditions.
A sustained move above $80,000 opens the path toward the $82,200 to $82,500 resistance zone. Losing the 20-day EMA puts $73,000 back in play as the next support level.
Key levels for BTC:
- $80,000 — breakout trigger, clears path to $82,200
- $77,178 — 20-day EMA, must hold
- $73,000 — next support if EMA breaks
Image: Shutterstock
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