The latest U.S. inflation data has given markets a fresh wave of optimism. The August CPI rose 2.7% year-over-year, in line with expectations, while the PPI cooled sharply to 1.8% compared to the forecast of 2.1%, signaling that underlying price pressures are easing across the economy. This data reassured investors that inflation is not re-accelerating, paving the way for the Federal Reserve to pivot toward a dovish stance.
Markets reacted swiftly as equities rallied, Treasury yields edged lower, and crypto assets surged as traders began pricing in an increased likelihood of rate cuts by the end of 2025. For cryptos like Bitcoin and Ethereum, this macro shift represents a powerful tailwind. Liquidity injections historically serve as rocket fuel for crypto bull markets, and with major uncertainties now cleared, attention is shifting back to price discovery and upside potential. The question is no longer whether the bull run continues, but how quickly BTC and ETH can reclaim their highs.
Bitcoin (BTC) is showing strong bullish momentum after consolidating near recent highs. With CPI and PPI cooling, the market is pricing in Federal Reserve rate cuts, boosting liquidity and risk appetite. Short-term support sits around $113K-$114K, while resistance approaches $117K-$120K. Institutional inflows and ETF approvals are adding upward pressure, setting the stage for potential medium-term targets of $130K-$140K.
The long-term BTC price rally suggests the token is reaching the edge of the persisting consolidation within a rising wedge. The weekly RSI trades above the average and has just displayed a bullish divergence, hinting towards a bullish continuation. Moreover, the crypto has rebounded before testing the support, substantiating the bullish claim. Therefore, the Bitcoin price seems to be primed to reach $125K, provided it surpasses and sustains above $118,000, this month.
Ethereum (ETH) is showing strong bullish potential as nearly 30% of its supply is staked, reducing circulating liquidity. With exchange balances at all-time lows and short positions at highs, ETH price is primed for upside pressure. The market is responding positively to cooling inflation and the rising probability of Fed rate cuts, which increases risk appetite. Short-term targets range from $2,800 to $3,200, while medium-term projections point toward $3,800 to $4,200, reinforcing Ethereum’s role in the ongoing crypto bull run.
After entering within the bullish range, the bulls seem to have weaken a little, as a result, the ETH price could tumble down to the local support. The CMF is plunging, hinting towards a drop in the money inflows. On the other hand, the MACD shows a drop in the buying pressure while the levels are about to undergo a bearish crossover. This suggests, the Ethereum price could probably test the support at $4,271 and of the bulls manage to defend these levels, a rebound could push price to new highs, otherwise, a drop below $4000 seems imminent.
Wrapping it Up!
The crypto market continues to display strong bullish momentum, with Bitcoin leading the charge but altcoins gradually gaining traction as well. Liquidity inflows, institutional participation, and sustained accumulation across major assets indicate growing confidence. A breakout in Bitcoin could ignite rallies in Ethereum and top altcoins, potentially triggering a broader market surge. Key levels at $125K for BTC and rising altcoin dominance suggest a new phase of the bull cycle. Overall, the setup points toward a powerful, market-wide rally ahead.
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