Bitcoin recovered toward $79,000 on Friday after August U.S. inflation data broadly matched forecasts, briefly easing market uncertainty. The cryptocurrency initially fell to $76,000 following the release before reversing course and gaining more than 3% on the day.

The Consumer Price Index rose 0.4% from July and 3.4% year over year, in line with economist expectations. U.S. equities followed a similar pattern: the S&P 500 rose 1% and the Nasdaq gained 1.1%, with both indexes recovering from weak session openings.

Gasoline was the main contributor to August’s inflation increase. Prices climbed 3.9%, accounting for more than one-third of the overall CPI rise, while the broader energy index increased 2.1%, according to the Bureau of Labor Statistics.

Core CPI, which excludes food and energy, increased 0.3% month over month, slightly above the 0.2% forecast. Core prices rose 2.4% annually, a modest decline from the previous reading.

Analyst Ted Pillows questioned the strength of Bitcoin’s recovery, saying the daily MACD remained in a downward trend and that Friday’s move was not supported by strong spot demand. He said Bitcoin could reach $85,000 if it records a strong weekly close above $80,000 alongside solid exchange-traded fund inflows, but added that the current market structure makes a dip more likely. The weekly close, ETF flows, and changing expectations for the Federal Reserve’s next decision therefore remain key near-term indicators in the conflicting market signals described by analysts.

$BTC daily MACD continues to trend down. Today's pump was also not driven by strong spot demand, and now the rate hike odds are going up too. If Bitcoin manages a strong weekly close above $80,000 with decent ETF flows, it could rally to $85,000. But looking at the current… pic.twitter.com/Z69uUY9y8e — Ted (@TedPillows) September 11, 2026

Rate Hike Odds Rise After CPI Report

Traders quickly increased their expectations for an interest-rate increase at the Federal Reserve’s September 16 meeting after the CPI report. According to CME Group’s FedWatch Tool, the probability of a 0.25% hike rose to 85–86%, up from approximately 60–70% one week earlier.

BREAKING: The odds of a September interest rate hike surge to 79% after US CPI inflation hits 3.4% in August. It is incredible to think that, at the start of 2026, markets were expecting the Fed’s 3rd interest rate CUT of the year this month. Inflation roars on and "higher for… pic.twitter.com/397cPkrWm2 — The Kobeissi Letter (@KobeissiLetter) September 11, 2026

Fed Chair Kevin Warsh has said the central bank will “have work to do” if inflation does not sustainably return toward its 2% target.

U.S. 30-year Treasury yields fluctuated sharply, briefly reaching their highest level since June 2004 before retreating to 5.309%.

Bond Yields Remain a Headwind for Bitcoin

Trading firm QCP Capital warned that elevated bond yields present a direct challenge to Bitcoin. The firm said the current environment, characterized by a 5% risk-free rate without a corresponding growth impulse, undermines the narrative that drove Bitcoin from $63,000 to $82,000 in late August.

QCP Capital added that Bitcoin could still benefit if Treasury buyback operations inject sufficient liquidity into markets.

U.S.-Iran military tensions remained a background risk. Escalating attacks on shipping, along with a new front involving Yemen’s Houthis and Saudi Arabia, pushed oil prices more than 11% higher this week.

Despite Friday’s rebound, Bitcoin remained on course to lose nearly 2% for the week, which would end three consecutive weeks of gains.

Source: CoinCentral