Bitcoin is back in the spotlight as fresh U.S. inflation data has intensified expectations of a Federal Reserve rate cut, bringing a boost across risk assets.
With CPI holding steady at 2.9% year-over-year, analysts suggest Bitcoin may now be primed for a fresh price discovery phase, setting sights on a new all-time high near $140,000.
Similarly, U.S. Core CPI (ex-Food/Energy) increased to 3.1%, the highest level since February, while weekly unemployment claims spiked to 263K, the highest since October 2021.
Fed Rate-Cut Expectations: The $140K Bitcoin Catalyst?
Additionally, the U.S. 10-year note yield officially dropped below 4% for the first time since April 4, confirming market readiness to fully price in three 25-bps interest rate cuts by year-end.
The odds of the cuts on Polymarket ahead of the Fed’s September 16th–17th FOMC meeting have now surged to 84% for a 25 bps cut, with 50 bps and no rate cut at 13.1% and 2.4%, respectively.
Source: PolymarketA 25 bps rate cut means the Federal Reserve lowers interest rates by 0.25%. For example, if the federal funds rate were 2.50%, a 25 bps cut would bring it down to 2.25%.
This indicates the Fed is shifting toward a more accommodative monetary stance to stimulate the economy.
For Bitcoin, the rate cut means cheaper money and a liquidity boost as investors seek higher returns in risk assets. Lower rates can also weaken the U.S. dollar, making BTC (a non-sovereign asset) more attractive.
Historically, Bitcoin rallies when markets anticipate easier monetary policy. The most prominent Fed rate cut cycle in recent times was in March 2020, when COVID-19 hit.
The Fed slashed rates by 50 bps on March 3, 2020, and then by a full 100 bps on March 15, 2020, bringing rates down to near zero (0–0.25%).
This triggered massive liquidity injections (QE), but initially, crypto markets (including Bitcoin) crashed due to panic selling.
However, as stimulus and rate cuts took effect, Bitcoin rallied from ~$5K in March 2020 to $69K by November 2021
Bitcoin’s Next Move: $105K Dip Before $140K Moon?
Now, BTC looks like it wants to mimic similar price action. Following the CPI data, BTC pumped above $114,500, but is now declining again, which shows that inflation is still hot, and markets are reacting accordingly.
Given that Bitcoin averaged a 9% drop after each CPI report in recent months, analysts point to a revisit of $105k-107K before the ultimate rally above $124k all-time highs.
Trader BitBull spotted a key MACD bullish crossover on Bitcoin’s chart, the first since the April low.
This technical sign occurred on September 5, when Bitcoin’s momentum indicators flipped positive, suggesting a potential trend reversal.
BitBull notes that similar patterns historically preceded major rallies: “Last time this setup occurred, Bitcoin surged 40% within a month and reached new highs.”
The MACD momentum shift could drive Bitcoin toward $140,000, aligning with price predictions from analysts, including Finam Holdings’ Nikita Stepanov.
More aggressive targets from Bitwise’s Matt Hougan and Arthur Hayes project $200k-$250k levels.
Technical Analysis: Bitcoin Chart Points to Bull Run Continuation
On the technical front, Bitcoin is now breaking out of a descending channel that has contained price action since mid-August.
The chart shows two key ascending triangle patterns.
One is completed and has already triggered a breakout above the channel resistance, and a larger ascending triangle in the downtrend phase is now being validated.
Source: TradingView/TrendDivaBased on these technical indicators, the price direction appears bullish in the near to medium term, with a target projection of $120,000.
However, traders should watch for any pullback to retest $109,116, which appears to be a strong support zone that should hold if the bullish thesis remains intact.
Looking at the weekly Bitcoin chart spanning over a decade, a clear cyclical pattern suggests we’re entering what could be the fifth major bull cycle since 2011.
Based on the historical pattern, Bitcoin appears to be transitioning from the accumulation zone into the parabolic bull phase.
The cyclical nature aligns with the consistent four-year pattern, which suggests a strong upside potential over the coming 4-8 months.
The post U.S. Inflation Stays at 2.9% to Boost Rate Cut Expectations – Bitcoin Rally to $140K? appeared first on Cryptonews.
