Major cryptocurrencies slipped from recent highs on Thursday, September 12, as a rally fueled by expectations of Federal Reserve rate cuts showed signs of stalling.
The latest inflation data made investors take a pause, but it did nothing much to change the prevailing market narrative ahead of the central bank’s historic meeting next week.
Consumer Price Index (CPI) increased 2.9 percent annually in August, as the economists predicted. The in-line reading consolidated market expectations towards monetary easing.
The FedWatch Tool provided by the CME shows that traders are currently pricing a 91 percent likelihood of a 25-point reduction in the rate next week and 78 percent likelihood of total reductions of three by the end of the year.
Reduced interest rates tend to increase the risk-sensitive assets such as crypto as people turn away from investments that yield interest.
The digital assets were unable to continue the momentum, although the macro outlook was supportive.
Bitcoin shot above $114,000 temporarily to reach its first time since late August before reversing to trade at 113,536, down 0.4% in 24 hours.
Ether dropped by 0.5 to $4,391 and XRP dropped by 1 percent to 2.98.
Analysts said the pullback was caused by profit-taking and positioning and not by a change in sentiment.
Bitcoin returned to its high of 114,000, is more repositioning than the beginning of a new run, according to the analysts at B2BINPAY.
Outside of macroeconomics, a tidal wave of corporate crypto activity is in support of the market.
Figure Technologies, a stablecoin issuer, priced its shares above its range of expectations in its initial public offering, raising $787.5 million which indicates good demand among investors.
Also, there is a trend of companies switching to crypto treasuries, which was firstly introduced by MicroStrategy (MSTR).
Companies such as QMMM Holdings, Eightco and 180 Life Sciences (since renamed ETHZilla) have experienced the rocketing of their shares following their announcement of such similar Bitcoin acquisition plans, highlighting the further integration of digital assets at the institutional level.