Bitcoin Defies Rate Hike Fears Amid Hawkish Expectations

The latest Consumer Price Index (CPI) data has been released, showing a higher-than-expected inflation rate. This has led to increased expectations of a Federal Reserve rate hike, which would typically be bearish for risk assets like Bitcoin.

However, the crypto market is defying this trend, with BTC rising in price following the release of the data. According to Woofun AI, the probability of a rate-hiking cycle next week has risen significantly, and analysts believe that hawkish expectations are already priced in.

The CPI data showed a core inflation rate of 0.3% month-on-month in August, exceeding economists' expectations of 0.2%. The overall inflation rate increased by 0.4% month-on-month and 3.4% year-on-year. Bank of America predicts the Federal Reserve will raise interest rates by 25 basis points next week, with an additional 50 basis points expected before the end of the year.

Olu Sonola of Fitch Ratings stated that the latest inflation data makes it 'increasingly difficult to justify continuing to pause rate hikes.' Bitcoin's price rose to $78,600 following the report's release, marking a 1.5% gain within 24 hours and demonstrating strong downside resistance.