Bitcoin Price Prediction: BTC Rises Unexpectedly Due to PPI Fall, Next Target $130,000?

An unexpected U.S. Producer Price Index (PPI) report triggered a broad rebound in the crypto market. The report showed that the PPI unexpectedly fell, enhancing market expectations that the Fed will cut interest rates in September, thereby boosting risk assets including Bitcoin. In this rebound, the price of Bitcoin broke through a key resistance level, while alts also experienced a new round of pump, signaling the arrival of "altcoin season." Market focus has now shifted to the upcoming Consumer Price Index (CPI) data for further confirmation of the bullish trend.

Economic Report Triggers Market Frenzy

PPI Unexpected Decline: According to data from the U.S. Bureau of Labor Statistics (BLS), the annualized Producer Price Index (PPI) for August unexpectedly fell by 0.1%, far below the market's general expectation of a 0.3% rise.

Interest rate cut expectations rise: This weak inflation data reinforces the market's view that the Fed is likely to cut rates at the Federal Open Market Committee (FOMC) meeting on September 17. According to data from the FedWatch tool, the market widely expects the Fed to cut rates by 25 basis points this month and again in October.

Market reaction: Interest rate cut expectations are usually favorable for risk assets like cryptocurrencies, as investors shift funds to these instruments in pursuit of higher returns. As a result, short positions worth $120 million in the crypto market were liquidated. Bitcoin and Ethereum were among the tokens that were liquidated the most.

Altcoin season begins, but Bitcoin is still expected to hit new highs

Altcoins perform strongly: While Bitcoin rebounds, major altcoins like Solana (SOL) also recorded strong rises.

Signs of capital rotation: The performance of alts has outperformed Bitcoin, signaling the start of what is being referred to as "altcoin season." This indicates that investors are rebalancing their portfolios to favor non-mainstream tokens that may offer higher returns in the later stages of the cycle. Although the "altcoin season index" compiled by CoinMarketCap currently stands at 59, the total market capitalization of alts has climbed to a level that confirms funds are strategically rotating towards these assets.

No Impact on BTC Potential: Although alts are performing brilliantly, this does not mean that Bitcoin cannot continue to pump. History shows that bullish momentum usually first affects the largest encryption assets and then spills over to smaller coins.

Technical Analysis: Bitcoin Target Price 130,000 USD

(Source: TradingView)

Bullish breakout: The Bitcoin daily chart shows that its price has successfully broken through the key resistance level of $112,000, which may signal the start of its next round of pump.

Potential target: Based on the recent trend of Bitcoin, this rally could drive its price up to $130,000. If trading volume can surge simultaneously, it will further confirm this bullish outlook.

Momentum Indicator: The Relative Strength Index (RSI) has risen above the 14-day moving average, signaling a buy. These strong technical indicators suggest that Bitcoin is poised for the next round of pump.

Looking Ahead:

The market will closely watch the Consumer Price Index (CPI) data to be released tomorrow to confirm the information conveyed by the PPI report. If the CPI is also lower than expected, it may trigger a stronger Rebound immediately after the data is released. Similarly, if the Fed cuts interest rates by a larger-than-expected margin, it will also provoke a strong reaction from the market, prompting investors to reassess asset valuations. Nevertheless, $130,000 remains the most logical next target price.