Bitcoin rebounds above $78K as US CPI matches forecasts, Fed hike odds rise to 81%

Bitcoin recovered above the $78,000 level after briefly slipping under $77,000, following the release of U.S. consumer price data for August.

Inflation data and market reaction

The U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose 0.4% month‑over‑month in August, matching expectations, and 3.4% year‑over‑year, unchanged from July. Core CPI, which excludes food and energy, increased 0.3% month‑over‑month, also above the 0.2% forecast, while its annual rate eased to 2.4% – the lowest since 2021.

Energy prices drove most of the monthly increase, with the energy index up 2.1%, gasoline up 3.9%, and annual energy inflation at 16.3%.

Cryptocurrency price movements

TradingView data showed Bitcoin moving back above $78,000 after the CPI release. Ether also climbed above $2,500 and Solana reclaimed the $100 level, each breaking psychological thresholds that had constrained them during the prior decline.

Fed rate‑hike expectations

Prediction‑market platform Polymarket assigned an 81% probability to a 25‑basis‑point Federal Reserve rate increase at the September 15‑16 meeting, up from about 59% before the data. Futures markets similarly lifted the odds of a hike, with Fed funds futures indicating a 61% chance after the jobs report released earlier in the week.

A quarter‑point hike would move the target range from 3.50‑3.75% to 3.75‑4.00%, marking the first increase since July 2023.

Broader market context

Higher Treasury yields – the two‑year at 4.38% and the 10‑year at 4.776% – add competition for investors between fixed‑income assets and crypto. Meanwhile, oil price volatility, driven by Middle‑East supply concerns, keeps inflation pressures elevated, with Brent crude trading above $100 per barrel.