U.S. inflation data delivered a mixed picture Friday as markets prepared for the Federal Reserve’s September 15–16 meeting. The Consumer Price Index rose 3.4% year over year and 0.4% month over month in August, with both readings matching consensus, according to data released by the Bureau of Labor Statistics.

The annual CPI increase was unchanged from July. Core CPI, which excludes food and energy, cooled to 2.4% annually from 2.5% in July, marking its lowest level since 2021. However, core prices increased 0.3% month over month, above the 0.2% economists had forecast. That hotter monthly reading became the main point of focus for markets, even as most of the report aligned with expectations.

Bitcoin initially fell after the data was released but later recovered, trading near $79,000 as investors assessed the figures ahead of the Federal Reserve’s forthcoming interest-rate decision. The report arrived five days before the Fed’s September meeting and represents the last major data point that Chair Kevin Warsh’s committee will receive before voting.

CME FedWatch, which tracks probabilities implied by 30-day federal funds futures, put the odds of a 25-basis-point hike at roughly 69%. Prediction markets were somewhat less confident: Polymarket priced the same outcome at 62%, while Myriad, a platform operated by Decrypt’s parent company Dastan, put the probability at 61%.

A rate increase would not be entirely unexpected. Three regional Federal Reserve presidents dissented in favor of a hike at the July meeting, and Warsh said in his first Jackson Hole keynote that the Fed still has “work to do” on inflation.

Crypto markets initially reacted negatively to the CPI release but subsequently moved higher. Ethereum led the major tokens, gaining 7.48% on the day to reclaim $2,611. Solana rose 4.53% and moved back above $100. Zcash was the strongest performer among the top 10 cryptocurrencies, rising 4.71% over 24 hours and 23.09% over the past week.

Total crypto market capitalization climbed back toward $2.7 trillion. The Crypto Fear & Greed Index, which had fallen to 56 after Thursday’s hotter-than-expected producer-price report, rose to 73, placing it firmly in “greed” territory. The Altcoin Season Index stood at 38, indicating that Bitcoin continued to account for most of the market’s relative strength while appetite for additional risk remained limited.

Spot Bitcoin exchange-traded funds recorded a net outflow of approximately $330.5 million during the day. That outflow indicated that the price rebound had not yet been accompanied by fresh institutional inflows.

Activity in derivatives markets also increased. Open interest across crypto futures rose 1.52% to $429.99 billion, while 24-hour trading volume increased 2.27% to $877.11 billion. The volatile session resulted in $897.09 million in liquidations, including $493.85 million in long positions and $403.24 million in short positions.

Bitcoin price and technical indicators

Bitcoin opened Friday at $76,529 and briefly declined toward the session low of $76,040 in the minutes following the CPI release. The initial move reflected a hawkish reaction to the hotter core monthly figure, but the market then reversed sharply.

Bitcoin subsequently reached an intraday high of $79,837 and was trading near $79,007, up 3.24% on the day and approaching the psychologically significant $80,000 level.

The most notable structural change on Bitcoin’s daily chart was the crossing of its exponential moving averages. The 50-day exponential moving average, or EMA, moved above the 200-day EMA, forming what traders call a golden cross. Traders commonly interpret that pattern as confirmation that the medium-term trend has turned bullish, while the opposite configuration, known as a death cross, is generally viewed as a warning of a potential reversal.

The crossover had only just occurred, however, and was not yet technically confirmed. There was not yet a significant gap between the two moving averages, meaning the pattern remained at an early stage.

Bitcoin’s Relative Strength Index, or RSI, was 59.7. That level is generally considered bullish but remained below 70, the threshold often used to indicate that an asset is overbought. The Average Directional Index, or ADX, which measures trend strength regardless of direction, was in the 40s. That was comfortably above the 25 threshold commonly used to distinguish a defined trend from market noise. The DI+ line was above DI-, indicating that buying pressure remained stronger than selling pressure according to the indicator.

A key support area remained below the current price. A Fibonacci retracement drawn from the summer low of $68,858 to the $82,281 high reached in late August placed Bitcoin’s “golden zone”—the retracement band that bullish traders would seek to defend—between $73,986 and $75,569.

The late-August high of $82,281 remained the next major level above the market. A move through that level would be needed for the rally to extend ahead of the Federal Reserve’s rate decision on Wednesday at 2 p.m. ET.

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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