Bitcoin Holds at $111K as Traders Await U.S. Inflation Data

Bitcoin prices slipped on Wednesday, extending their rangebound trend as investors awaited critical U.S. inflation data that could influence the Federal Reserve’s next interest rate move. The leading cryptocurrency dropped 1.3% to $111,576.5 by 02:04 ET (06:04 GMT), hovering in a narrow band for nearly a month after retreating from record highs in mid-August.

Uncertainty over U.S. economic conditions and the Fed’s policy outlook continues to weigh on Bitcoin and broader crypto markets. Traders are cautious, favoring traditional risk assets over speculative ones like digital currencies. Despite a sharp rebound in crypto-related stocks such as Circle Internet Group Inc. (NYSE:CRCL) and Bullish Inc. (NYSE:BLSH), the recovery has not translated into sustained momentum for tokens.

The crypto sector has notably lagged the recent rally in tech stocks, which has been fueled by artificial intelligence optimism. Bitcoin’s earlier surge on hopes for more favorable U.S. regulations has since lost steam, with sentiment further pressured by skepticism over corporate Bitcoin adoption. Recent purchases by MicroStrategy (NASDAQ:MSTR) and Japan’s Metaplanet Inc. (TYO:3350) sparked little bullish response.

Markets are now focused on U.S. producer price index data due Wednesday and consumer price index data on Thursday. Inflation readings will play a key role in shaping Fed policy, especially with higher import tariffs in effect since August. According to the CME FedWatch tool, traders are pricing in a 93.1% chance of a 25 basis point cut at next week’s Fed meeting, with a 6.9% chance of a larger 50 bps cut.

Altcoins mirrored Bitcoin’s weakness, with Ether slipping 1.4% to $4,304.15, XRP down 1.4% to $2.9510, and Cardano losing 1%. Solana gained 0.4%, while Dogecoin fell 0.7%.