Headline U.S. inflation data surprised to the upside, with the consumer price index rising 0.4% month-over-month in August compared to analysts’ 0.3% projection. While this moderation in inflation remains consistent with long-term central bank goals, it represents a marginal increase over expectations and prompted fresh debate about the timing and scale of the Federal Reserve’s policy response.
At the same time, revised labor market figures revealed a significant downward adjustment in payrolls for the first half of the year. The Bureau of Labor Statistics reported that previous job growth estimates were overstated by roughly 1 million positions, marking the largest retrospective revision on record. August’s official employment gain of 22,000 fell well below median forecasts and contrasted sharply with the initial estimates published earlier in the summer.
In response to the macroeconomic backdrop, bitcoin exhibited notable strength on Friday, climbing above $116,000 during the U.S. trading session. Price action continued to carve higher lows, extending a bullish trajectory that has been in place since the September bottom near $107,500. The digital asset approached the unfilled CME futures gap at approximately $117,300, a level that often attracts significant buying interest from derivatives traders seeking to close open arbitrage positions.
Technical indicators reinforced the optimistic outlook. On the daily chart, bitcoin remained above its 200-day moving average, which recently climbed to $102,083, reflecting sustained accumulation by longer-term holders. The short-term holder realized price metric, frequently used as an informal support level during bull markets, also reached a record high, suggesting that recent buyers have yet to face material losses and are unlikely to capitulate under current market conditions.
Trading volumes on major spot platforms held near multi-week highs, while liquidations in futures markets remained muted. This balance indicated that speculative fervor has settled into a constructive pattern, with neither extreme euphoria nor panic dominating order books. Open interest in perpetual swaps continued to tick upward, pointing to a gradual increase in leverage among market participants preparing for a potential breakout beyond the current range.
Market sentiment benefited from cross-asset dynamics. U.S. Treasury yields declined after the labor revisions, easing the credit backdrop and narrowing yield differentials that had previously pressured risk assets. The dollar index weakened modestly, further supporting inflows into both crypto and equities. Major stock indices reached fresh record highs, suggesting that investor risk tolerance remains elevated even amid mixed economic signals.
Looking ahead, market participants will closely monitor the Federal Reserve’s upcoming meeting, where policy guidance may shift in light of surprising inflation persistence and cooling employment figures. A dovish tilt could catalyze additional gains in bitcoin and other risk-on assets, while hawkish rhetoric might trigger short-term profit-taking and volatility spikes.
For now, bitcoin’s ability to defend recent support levels and press higher against a complex macroeconomic backdrop underscores its resilience. Traders and investors alike will watch price behavior around the CME gap and key moving averages, seeking confirmation that the current bullish momentum can sustain a push toward fresh all-time highs in the weeks to come.
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