Market Rally

Bitcoin and the broader crypto market are rising today, Sept. 10, after the United States reported encouraging producer inflation data.

Bitcoin Price Increase

Bitcoin price rose by 1.1% in the last 24 hours, while top coins like Ethereum, Binance Coin, and Solana rose by over 2%. This surge in prices is a positive sign for the crypto market.

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.

Producer Price Index

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 are significant as they arrived ahead of the closely watched consumer price index data.

Consumer Price Index

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.

Federal Reserve Expectations

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%.

Stock Market Surge

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. The positive sentiment in the stock market has also contributed to the crypto market rally.

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.

Strong Performance

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.

Risk Assets

While these companies are not directly related to the crypto industry, their strong performance drew investors to risk assets. This increased demand for risk assets has contributed to the rally in the crypto market.

Futures Open Interest

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.

Crypto Performance

Cryptocurrencies tend to perform well in periods of high open interest, as this indicates increased demand in the futures market. As the crypto market continues to rally, it will be interesting to see how it performs in the coming days. For more information and updates, visit bitpulse.