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Worlds largest cryptocurrency by market cap Bitcoin is in the spotlight again after, climbing above $115,500 with a daily gain of about 2.5%. This move is not random, it reflects a mix of economic signals, investor behavior, and technical patterns that are fueling optimism.
Let’s break down what’s driving today’s rally.
Cooling Inflation Sparks Optimism
One of the biggest reasons behind Bitcoin’s surge is the latest U.S. inflation data. The Producer Price Index (PPI) came in at 2.6% year-over-year, much lower than the expected 3.3%.
This suggests that inflation is cooling, and investors immediately shifted toward risk assets like Bitcoin.
While the U.S. dollar inflation rate sits around 2.7%, Bitcoin’s own inflation is only 0.8–0.9%, making it more attractive in the eyes of long-term holders.
ETFs Show Big Institutional Demand
Another important factor is the surge of inflows into spot Bitcoin ETFs. On September 10 and 11, U.S. ETFs recorded $742 million and $186.5 million in inflows, one of the strongest buying streaks in weeks.
These consistent inflows show that large investors are not exiting but steadily accumulating Bitcoin. ETFs now represent 3.7% of the total crypto market cap, providing a solid liquidity floor that supports price growth.
Fed Rate Cuts Around the Corner
With just five days left before the Fed’s rate cut decision, market data now shows a 100% chance of cuts, with some even expecting a larger 50bps move. Such easing is usually positive for risk assets, as it lowers borrowing costs and makes Bitcoin more appealing.
At the same time, the U.S. dollar index is weakening, making Bitcoin cheaper for international buyers. Combined with stronger correlations to equities, Bitcoin is benefiting from a broader wave of risk-on sentiment.
Technical Signals Point Higher
After weeks of consllidating below $112k, Bitcoin’s recent rally has pushed it past the $115,000 resistance after several failed attempts. Adding to the optimism, a MACD golden cross has formed on the daily chart, a signal that last time led to a 40% surge in price.
If history repeats, Bitcoin could be on track to test $160,000 in the coming months. Some, like Tom Lee of Bitmine, even see the possibility of $200,000 by 2025 if rate cuts stay in play.
