Tag Archives: inflation

CPI countdown: How Friday’s inflation data could make or break the crypto rally

CPI countdown: How Friday’s inflation data could make or break the crypto rally

Recent market movements reflect a cautious optimism that hinges on several interlocking variables, none more pivotal than the upcoming release of the US Consumer Price Index (CPI) for September. With core CPI projected to rise 0.3 per cent month-over-month, marking the third consecutive month at that pace, and annual core inflation holding steady at 3.1 per cent, investors are navigating a narrow corridor between hope for monetary easing and fear of persistent price pressures. This tension is evident across both traditional and digital markets, where risk appetite has improved but remains fragile.

Equity markets responded positively to signals of thawing US-China relations, as the White House confirmed that former President Donald Trump will meet with Chinese President Xi Jinping during his Asia tour. Though Trump is not currently in office, the symbolic weight of such a meeting, combined with broader expectations of de-escalation in trade tensions, lifted sentiment.

US equities posted gains across the board on Thursday, with the Dow Jones Industrial Average climbing 0.31 per cent, the S&P 500 up 0.58 per cent, and the Nasdaq Composite leading the charge with a 0.89 per cent advance, driven largely by technology stocks. This tech-led rally underscores a persistent dynamic. Bitcoin and other risk assets continue to trade in close correlation with the Nasdaq-100, currently exhibiting a 0.61 correlation coefficient. As such, any volatility in the tech sector will likely spill over into crypto markets.

Simultaneously, Treasury yields moved higher in anticipation of Friday’s CPI release. The 10-year yield rose by 5.2 basis points to 4.001 per cent, while the 2-year yield climbed 4.4 basis points to 3.489 per cent. These moves reflect investors recalibrating their expectations for Federal Reserve policy. Markets now assign a 98.3 per cent probability to a rate cut at the upcoming Fed meeting, a dramatic shift fuelled partly by the delayed CPI report and partly by perceived regulatory leniency.

Reports circulated that Trump pardoned Changpeng Zhao, the founder of Binance. While the veracity of that pardon claim warrants scrutiny given Trump’s current non-presidential status, the market interpreted it as a signal of reduced regulatory hostility toward major crypto players. This perception alone has been enough to ease anxiety and encourage capital deployment.

The US Dollar Index edged up marginally to 98.936, a modest gain of 0.04 per cent, while gold rose 0.68 per cent to US$4,126.28 per ounce, a notable level that reflects both safe-haven demand and inflation hedging ahead of the CPI print. Meanwhile, Brent crude surged 5.4 per cent to US$65.99 per barrel following the enforcement of US sanctions on leading Russian oil firms, adding another layer of macro uncertainty through potential energy price volatility.

Within the crypto sphere, the past 24 hours saw a 1.96 per cent increase in total market capitalisation, extending a weekly gain of 1.44 per cent. Despite this momentum, the market remains 3.87 per cent below its 30-day high, suggesting that while sentiment has stabilised, full bullish conviction has yet to return. Three primary forces are driving this rebound. Binance’s reinforced market dominance, improving macro conditions, and renewed excitement around decentralised finance innovation, particularly around stablecoin design and real-world asset tokenisation, all contribute to the current uplift.

Binance’s role in this rally cannot be overstated. The exchange reported US$2.55 trillion in monthly futures trading volume, according to CoinMarketCap, and captured a staggering 87 per cent of Bitcoin futures taker volume. Its spot market share has climbed to 41.1 per cent, with institutional inflows concentrating in BTC/USDT pairs. This dominance signals a significant shift in market psychology.

After the collapse of FTX, users and institutions alike grew wary of centralised exchange counterparty risk. Binance’s ability to not only survive its own regulatory reckoning but also expand its liquidity depth has restored a measure of trust. Capital is flowing back, not just from retail, but from institutional players seeking reliable on and off ramps. The upcoming relaunch of WazirX on October 24, with zero-fee trading, could further catalyse retail participation, especially in emerging markets where cost sensitivity remains high.

On the macro front, the delayed CPI report has created a temporary window of ambiguity that markets are exploiting for risk-taking. With inflation expectations anchored around 3.1 per cent year-over-year for core CPI, traders are betting that the Fed will pivot toward easing as early as next week.

Historically, lower interest rates weaken the US dollar and boost non-yielding assets like Bitcoin and gold. The tight correlation between Bitcoin and the Nasdaq-100 complicates this narrative. If tech stocks stumble, perhaps on disappointing earnings or hawkish Fed commentary, crypto could quickly lose its footing, regardless of monetary policy shifts.

Perhaps the most forward-looking driver of current market dynamics lies in DeFi innovation. Solana’s ecosystem has gained attention with the launch of USX, a yield-bearing stablecoin developed by SolsticeFi. Unlike traditional algorithmic or fiat-collateralised stablecoins, USX employs a proof-of-reserve model verified by Chainlink oracles, enhancing transparency and trust. Social mentions of USX surged 67 per cent, indicating strong community and developer interest. This innovation arrives at a critical time, as the stablecoin sector seeks alternatives to centralised models following repeated regulatory crackdowns.

Concurrently, Ethereum shows technical signs of recovery, with its 14-day Relative Strength Index at 48.38, below the neutral 50 mark but with room to run if it breaches the US$3,900 resistance level. Institutional-grade DeFi applications are also gaining traction, exemplified by T-RIZE’s US$300 million real estate tokenisation initiative, which bridges traditional finance with blockchain infrastructure.

Despite these positive developments, caution remains warranted. Bitcoin’s market dominance stands at 59.3 per cent, a level that typically signals investor preference for safety within the crypto space and hesitation toward altcoins. This suggests that while capital is returning, it is doing so selectively. Ethereum and Solana benefit from strong narratives, including scalability, institutional adoption, and novel financial primitives, but they must contend with Bitcoin’s gravitational pull.

The immediate future hinges on Friday’s CPI data. A print below 3.1 per cent year-over-year for core inflation would likely validate the market’s dovish expectations, potentially extending the current rally across equities, crypto, and commodities. A hotter-than-expected number could trigger a sharp reversal, as it would force a reassessment of Fed policy and reignite fears of prolonged high rates. In such a scenario, even Binance’s liquidity depth and DeFi’s innovation might not be enough to sustain momentum.

In conclusion, today’s market wrap reveals a complex interplay of short-term catalysts and long-term structural trends. The crypto market is no longer an isolated domain. It responds acutely to macroeconomic signals, regulatory whispers, and technological breakthroughs. Binance’s dominance provides a foundation of liquidity, easing macro fears offer temporary tailwinds, and DeFi’s evolution promises sustainable growth beyond speculative cycles.

The path forward remains contingent on external data, most immediately the CPI report, that will either confirm the market’s optimism or expose its fragility. Investors would do well to balance enthusiasm with vigilance, recognising that in this new era of interconnected finance, no asset class moves in isolation.

 

Source: https://e27.co/cpi-countdown-how-fridays-inflation-data-could-make-or-break-the-crypto-rally-20251024/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Soft landing or FOMO return? Markets rally on Fed cut amidst inflation caution

Soft landing or FOMO return? Markets rally on Fed cut amidst inflation caution

Global risk sentiment has improved markedly in recent days, driven by the Federal Reserve’s decision to lower interest rates, which has injected fresh optimism into financial markets worldwide. Investors appear to view this move as a signal that policymakers are prioritising economic growth amid signs of a cooling labour market, even as inflation remains somewhat elevated. The cut has ripple effects across asset classes, from equities to commodities and cryptocurrencies, fostering an environment where risk-taking feels more rewarded. In this context, Wall Street has pushed to new heights, while emerging trends in digital assets suggest a sector on the cusp of broader institutional acceptance.

The Federal Reserve announced a 25 basis point reduction in its benchmark rate on September 17, bringing it down from previous levels and marking the first easing since late last year. This adjustment aims to support hiring and prevent a sharper slowdown in employment, as recent data showed initial jobless claims dropping significantly to 231,000 for the week ending September 13, the largest decline in nearly four years. Officials emphasised that the move addresses risks to the job market while keeping an eye on inflation, which ticked up slightly to 2.9 per cent in August but remains within a manageable range. Markets had largely anticipated this step, with probabilities exceeding 75 per cent leading up to the announcement, though some volatility ensued as traders digested the forward guidance indicating potential for two more cuts by year-end.

In contrast, the Bank of England opted to hold its key rate steady at four per cent on September 18, citing persistent inflationary pressures alongside uncertainties in growth and the jobs landscape. The Monetary Policy Committee voted 7-2 to maintain the status quo, with members expressing caution that the UK economy is not yet out of the woods on price stability. Looking ahead, the Bank of Japan is set to reveal its policy stance today, with expectations leaning toward no change from the current 0.5 per cent short-term rate, as officials navigate tariff risks and a potential US slowdown. These divergent approaches among major central banks highlight a global economy at a crossroads, where easing in one region could spill over to influence others.

Equity markets have responded positively overall, with US indices scaling fresh peaks on September 18. The Dow Jones Industrial Average climbed 0.27 per cent to close above 46,000, the S&P 500 advanced 0.48 per cent to around 6,600, and the Nasdaq Composite surged 0.94 per cent to over 22,200, buoyed by strength in technology shares. This rally reflects investor confidence that lower borrowing costs will sustain corporate earnings and consumer spending. Yields on US Treasuries moved higher in response to the robust jobless claims figure, which eased fears of a rapid labour market deterioration. The 10-year Treasury note rose three basis points to above 4.11 per cent, while the 2-year yield increased two basis points to 3.56 per cent. Such movements suggest markets are pricing in a soft landing rather than a recession, though the bond market’s reaction also underscores ongoing sensitivity to economic data.

Currency and commodity dynamics have shifted as well. The US dollar index strengthened by 0.49 per cent to 97.35, benefiting from the perception of relative US economic resilience amid global uncertainties. Gold prices dipped 0.4 per cent to US$3,643.40 per ounce, as profit-taking followed a recent record high, with the metal’s appeal dimming slightly in a risk-on environment. Brent crude oil fell 0.9 per cent to US$67.32 per barrel, pressured by concerns over US demand despite the rate cut’s potential to stimulate activity. These declines illustrate how commodities are caught between supportive monetary policy and lingering worries about global growth, particularly with trade tensions simmering.

Asian equities displayed a mixed performance, trimming some gains post the Fed’s meeting but still showing resilience in key benchmarks. Japan’s Nikkei 225 crossed the 45,000 threshold for the first time, closing higher amid a tech-led advance, reflecting spillover optimism from US markets. Early trading today saw varied movements across the region, with US futures pointing to a positive open, suggesting the upbeat sentiment may persist. This regional response highlights the increasing interconnectedness of global markets, with policy shifts in the US often setting the tone for Asia’s trading sessions.

Cryptocurrencies, on the other hand, have shown remarkable vigour, with Bitcoin maintaining momentum around US$117,000 despite initial sluggishness following the rate cut. Technical indicators point to a bullish setup, with a trend line support at US$115,800 and recent breaks above resistances at US$116,200 and US$116,500. The price peaked at US$117,920 before a minor retracement to the 50 per cent Fibonacci level near US$116,750. Analysts anticipate resistance at US$117,500 and US$117,850, with a clear breach of US$118,000 potentially propelling it toward US$118,500 or even US$118,800. On-chain data reveals strong institutional accumulation, with ETF flows and whale activity supporting the floor. Social media discussions on platforms such as X highlight this breakout potential, with traders noting that a close above US$117,000 on high volume could ignite further upside. However, overbought signals from the RSI above 88 suggest a possible short-term pullback, with supports at US$116,550 and US$115,800 if resistance holds firm.

Solana has emerged as a standout performer, rallying beyond US$250, its highest in nearly eight months, and outperforming the altcoin market by 25 per cent over the past month. Institutional adoption drives this surge, with corporations holding over 17 million SOL tokens valued at US$4.3 billion. Notable players include Forward Industries with 6.82 million SOL, Sharps Technology at 2.14 million, and others like Defi Development Corp and Upexi Inc., nearing 2 million each. Helius Medical Technologies’ $500 million SOL treasury program echoes strategies like MicroStrategy’s Bitcoin reserves, bolstering SOL’s case as a reserve asset. The blockchain’s total value locked stands at US$14.6 billion, making it the second-largest DeFi ecosystem, while a 6.8 per cent staking yield surpasses Ethereum’s 2.9 per cent. Options data shows higher call premiums, indicating bullish trader sentiment, with predictions eyeing US$300 as the next target amid ETF approval hopes. X conversations amplify this enthusiasm, with users pointing to treasury strategies and network upgrades as catalysts.

Regulatory developments have further catalysed crypto’s ascent. The US and UK signed a memorandum to collaborate on quantum computing and AI, impacting blockchain security. Coinbase CEO Brian Armstrong expressed confidence in the Digital Asset Market Clarity Act passing through Congress, clarifying the roles of the SEC and CFTC. Australia’s ASIC eased stablecoin licensing, while the SEC approved Grayscale’s Digital Large Cap Fund—the first multi-asset crypto ETF and proposed rule changes to expedite ETF listings. These steps signal a maturing framework, reducing uncertainty and attracting institutional capital.

From my perspective, this moment feels pivotal for cryptocurrencies. The convergence of monetary easing, regulatory clarity, and institutional inflows positions digital assets for sustained growth, potentially eclipsing traditional markets in volatility but also in returns. Bitcoin’s resilience above US$117,000 amid broader economic shifts suggests it’s evolving from a speculative play to a legitimate hedge, much like gold in past cycles. I remain cautious. Rate cuts don’t erase risks like stagflation or geopolitical tensions, and crypto’s history of sharp corrections warrants prudence. Investors should diversify their portfolios and closely monitor macroeconomic indicators.

Source: https://e27.co/soft-landing-or-fomo-return-markets-rally-on-fed-cut-amidst-inflation-caution-20250919/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

The great divergence: How US inflation, jobless claims, and crypto charts are clashing ahead of the Fed’s big decision

The great divergence: How US inflation, jobless claims, and crypto charts are clashing ahead of the Fed’s big decision

As the calendar flips to September 12, 2025, financial markets around the world hum with a mix of optimism and caution, driven by recent economic data that has solidified expectations for the Federal Reserve’s upcoming policy moves.

Global risk sentiment remains broadly positive, with Asian equities edging close to all-time highs in early trading sessions, buoyed by encouraging signals from US inflation figures and labour market indicators. Hong Kong and mainland Chinese markets have taken the lead in this upward push, reflecting renewed investor confidence amid hopes for monetary easing.

Meanwhile, US stock futures point to a flat opening, suggesting a pause after the previous day’s gains, where the S&P 500 climbed 0.9 per cent, the Nasdaq advanced 0.7 per cent, and the Dow Jones surged 1.4 per cent. This rally in US equities stems largely from growing anticipation that the Fed will deliver an interest rate cut at its September 17 meeting. This move could inject fresh liquidity into risk assets and extend the current uptrend.

Looking into the latest US economic releases, the August consumer price index revealed a nuanced picture of inflation dynamics. Core prices, which strip out volatile food and energy components, increased by 0.3 per cent monthly and 3.1 per cent year-over-year, aligning closely with economist projections and signalling that underlying inflationary pressures remain contained but persistent.

Headline CPI ticked up by 0.4 per cent in August, marking an acceleration from prior months and pushing the annual rate to 2.9 per cent, the highest since early 2025. This uptick can be attributed in part to businesses preemptively passing on costs related to anticipated tariffs under the Trump administration’s trade policies, which have begun to ripple through supply chains and consumer goods pricing.

Concurrently, weekly jobless claims surged to 263,000, the highest level in nearly four years and exceeding market forecasts, highlighting emerging softness in the labor market. This jump in unemployment filings, combined with a slight rise in the jobless rate to 4.2 per cent in August, underscores a weakening employment landscape that has pulled the Fed in conflicting directions: persistent inflation argues for caution, while labor market fragility demands stimulus.

Despite these tensions, the data has cemented bets on a rate reduction, with markets pricing in a 100 per cent chance of at least a 25 basis point cut next week, and roughly 50 per cent odds of a more aggressive 50 basis point move.

Bond markets have reacted accordingly, with US Treasuries posting gains overnight. The 10-year yield dipped 2.5 basis points to 4.02 per cent, while the 2-year yield edged down 0.2 basis points to 3.54 per cent, reflecting investor flight to safety amid the mixed economic signals. The US Dollar Index consolidated with a modest 0.3 per cent decline, as traders weighed the implications of looser policy on currency strength.

Commodities presented a more varied picture: gold slipped 0.2 per cent, maintaining its role as a hedge against uncertainty, but Brent crude tumbled 1.7 per cent below US$67 per barrel, pressured by ongoing oversupply fears from OPEC+ production and sluggish global demand. These movements illustrate a market in transition, where the promise of Fed easing supports equities and bonds, yet commodity weakness hints at underlying economic headwinds that could temper the enthusiasm.

Turning to the cryptocurrency space, Bitcoin has captured particular attention with its 1.55 per cent rise over the past 24 hours, outpacing the broader crypto market’s 1.83 per cent gain. This daily uptick aligns with a weekly advance of 3.82 per cent, though it trails behind monthly and quarterly averages, down 3.1 per cent and 3.6 per cent, respectively.

As of September 12, 2025, Bitcoin hovers around US$114,290, having rebounded from recent lows near US$111,500 but still testing resistance at US$115,000. This price action occurs against a backdrop of several bullish catalysts. Foremost among them is the heightened probability of Fed rate cuts, which historically boost risk-on assets like cryptocurrencies by lowering borrowing costs and encouraging investment in high-growth sectors. Markets now assign 50 per cent odds to a 50 basis point cut on September 17, a scenario that could flood the system with liquidity and propel Bitcoin higher.

Additionally, regulatory tailwinds from the SEC’s proposed generic listing standards for crypto ETFs promise to streamline approvals for altcoin products, potentially accelerating inflows and broadening market participation. The agency has already greenlit in-kind creations and redemptions for crypto exchange-traded products in August 2025, aligning them with traditional commodity funds and reducing operational frictions. Complementing this, stablecoin reserves on exchanges have swelled to a record US$70 billion, indicating ample dry powder for buying but also raising concerns about potential selling pressure if sentiment sours.

However, beneath this surface buoyancy lurk technical signals that suggest Bitcoin’s uptrend may be faltering. The cryptocurrency has formed a rising wedge pattern on its charts, characterised by two ascending and converging trendlines that often precede bearish reversals. As these lines approach their apex, the risk of a breakdown intensifies, with analysts warning of a potential drop below US$100,000 if support levels give way. The Average Directional Index, a key trend strength indicator, has retreated from a year-to-date peak of 60 to around 24, pointing to diminishing momentum in the current rally.

Compounding this, the Relative Strength Index exhibits a bearish divergence, where the oscillator forms a descending channel even as prices climb, a setup that frequently heralds strong downward breakouts. Recent analyses highlight this divergence on weekly timeframes, with RSI flashing triple bearish signals that echo historical fragility points in equities, such as the 1998 LTCM crisis or the 2008 financial meltdown.

Moreover, Bitcoin’s price action mirrors patterns from past cycles, including a potential double top reminiscent of 2021, which preceded a 77 per cent correction. September’s historical underperformance, averaging negative returns since 2013, adds another layer of caution, with some projections eyeing a dip to US$108,802 or even US$88,000 in a deeper pullback.

Sentiment on social platforms like X reflects this dichotomy, with users debating the Fed cut’s implications. Some warn of a “sell the news” event, where Bitcoin rallies in the lead-up to the announcement only to crash afterward, as the cut, whether 25 or 50 basis points, may already be fully priced in by participants.

Posts highlight JPMorgan’s caution that easing might not trigger a uniform risk-on surge, potentially sparking a broader market dump. Others point to whale selling pressure, with over 100,000 BTC offloaded recently amid frozen corporate buys, and miner outflows turning bearish post-halving.

Bullish voices counter with observations of institutional accumulation, including 1,417 entities holding over 1,000 BTC each, and daily corporate purchases averaging 1,400 BTC, signaling long-term confidence. Threads discuss Bitcoin’s resilience, noting hidden bullish divergences in RSI near oversold levels and a flattening MACD, which could catalyse a rebound if liquidity flows resume. One prominent analyst frames the setup as a consolidation phase, with the Network Value to Transactions ratio at 1.51, well below overvaluation thresholds, suggesting sustainable growth driven by utility rather than speculation.

In my view, while the bearish technical indicators and historical September weakness pose genuine short-term risks, Bitcoin’s trajectory remains fundamentally upward over the longer horizon. The Fed’s impending cut, even if it triggers a knee-jerk selloff, will ultimately enhance liquidity in a way that benefits high-beta assets, such as cryptocurrencies, especially as dollar weakness from policy easing drives capital into alternatives like Bitcoin, often referred to as “digital gold.”

Regulatory progress on ETFs, coupled with surging stablecoin reserves, underscores growing institutional adoption that could absorb any temporary dips. Historical parallels, such as post-halving Septembers leading to Q4 surges, suggest this correction might be a buying opportunity rather than a prelude to collapse.

That said, a failure to hold US$113,500 support could accelerate downside toward US$100,000, validating the wedge breakdown. Investors should monitor the Fed’s decision closely: a 50 basis point surprise might ignite a rally to US$120,000, as some inverse head-and-shoulders patterns imply, while a cautious 25 basis point trim could extend the choppiness.

Overall, the interplay of macro easing and crypto-specific tailwinds tilts the scales toward optimism, provided global growth holds steady amid tariff uncertainties. This moment feels like a pivotal inflection point, where patience and data-driven positioning will separate winners from those caught in volatility’s grip.

 

Source: https://e27.co/the-great-divergence-how-us-inflation-jobless-claims-and-crypto-charts-are-clashing-ahead-of-the-feds-big-decision-20250912/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j