Bitcoin trades at $79,000, next week’s US inflation data to test rate-cut hopes and crypto valuations
Bitcoin hovered near $79,000 as investors awaited US inflation data for clues on Federal Reserve policy. Softer inflation could revive rate-cut hopes, while hotter data may reinforce higher-for-longer expectations. Ethereum and major altcoins also declined, while institutional crypto demand strengthened through ETF inflows despite recent volatility and mixed macro signals.
Bitcoin hovered around the $79,000 level on Tuesday as traders watched closely for next week's U.S. inflation data. Economists predict a softer Consumer Price Index (CPI) could reignite hopes for interest rate cuts, whereas a stronger-than-anticipated figure would bolster the "higher-for-longer" outlook and exert additional downward pressure on crypto prices. Bitcoin was trading at $79,644, while Ethereum was down 2.3% at $2,452.
Over the past 24 hours, Bitcoin slipped by 1.8%, while Ethereum followed suit with a 2.3% decline. Among the prominent altcoins, BNB, XRP, Solana, Hyperliquid, Dogecoin, and Cardano experienced a 5.4% drop, while Tron saw a modest 0.9% increase. The overall crypto market cap decreased by 1.4% to $2.77 trillion, according to CoinGecko.
Riya Sehgal, a Research Analyst at Delta Exchange, commented that the crypto markets entered the weekend after a sudden shift that exposed their vulnerability to U.S. monetary policy changes. Bitcoin broke above $82,000 amid reduced expectations of a September rate hike and a resurgence of institutional investment. Ethereum also regained the $2,500 mark, but this rally was short-lived and reversed following Friday's U.S. jobs report.
Sehgal added that while the rally still holds, the subsequent direction will depend on macroeconomic data. Bitcoin must sustain the $78,500–$79,000 range after its dip near $82,000. Ethereum, on the other hand, is looking for support at around $2,440, with $2,500 representing a crucial level for any recovery.
In the preceding week, Bitcoin and Ethereum posted gains of 2.5% and 0.4%, respectively. Among the major altcoins, BNB, XRP, Hyperliquid, and Cardano surged by up to 4.9%, while Solana, Tron, and Dogecoin experienced corrections of up to 2.4%.
Global macro conditions remained mixed but generally favorable for crypto during the week, according to Nischal Shetty, the Founder of WazirX. Shetty noted that institutional demand for crypto surged this week, with ETF products accumulating approximately $510 million across four trading sessions as of September 4th.
Shetty explained that Bitcoin's surge past $81,000 and Ethereum's recovery above $2,500 indicated growing spot market demand and expanding macro liquidity.
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