Bitcoin and the broader crypto market are rising today, Sept. 10, after the United States reported encouraging producer inflation data.
Summary
- The crypto market rallied after the encouraging US inflation data.
- This report pushed some analysts to predict a 0.50% rate cut next week.
- Cryptocurrencies also rose after the strong Oracle and TSMC earnings.
Bitcoin (BTC) price rose by 1.1% in the last 24 hours, while top coins like Ethereum (ETH), Binance Coin (BNB), and Solana (SOL) rose by over 2%.
Crypto market rallies after US inflation data
The main driver of the rally was a Bureau of Labor Statistics report showing that producer inflation eased in August.
The headline PPI fell from 0.7% in July to minus 0.1% in August. This decline translated to an annual figure of 2.8%, lower than the previous 3.4%. Separately, the headline PPI dropped from 3.1% to 2.6%, better than the median estimate of 3.3%.
These numbers arrived ahead of the closely watched consumer price index data. Economists polled by Reuters expect the upcoming report to show that the headline CPI rose from 2.7% to 2.9%, while core inflation remained at 3.1%. Based on the PPI report, there is a possibility that the CPI figure will come in lower than expected.
The crypto market rose as investors predicted that the Federal Reserve would cut interest rates next week. While the estimate is a 0.25% cut, some analysts, especially those from ING Bank and Standard Chartered, believe that the bank will cut by 0.50%.
These Fed expectations help explain why the stock market also surged, with futures tied to the S&P 500 and Nasdaq 100 indices rising to a record high.
Bullish sentiment after Oracle earnings
The crypto market also jumped as sentiment improved following robust Oracle earnings and a monthly report from Taiwan Semiconductor. Oracle stock gained more than 32%, while other AI-focused companies like Nvidia, Microsoft, and Broadcom continued their momentum.
In its report, Oracle said its backlog rose 350% to more than $455 billion, a trend management expects will continue this year. TSMC, the largest chip manufacturer, advanced after saying that its August sales rose 34%, higher than expected.
While these companies are not directly related to the crypto industry, their strong performance drew investors to risk assets.
Meanwhile, CoinGlass data show that futures open interest jumped 2% in the past 24 hours to more than $214 billion. This increase coincided with a 16% drop in liquidations to $280 million.
Cryptocurrencies tend to perform well in periods of high open interest, as this indicates increased demand in the futures market.