Crypto markets jumped modestly on Friday with back over $ 110,000. Ethereum’s surpassed with a gain of 3.8% to cross $ 4,000 while rose 3.4% and Added 2.5%.
The cautious bid came when fresh inflation data landed completely in accordance with forecasts. Fed’s preferred targets for prices, the index for personal consumption expenses (PCE), increased 2.7% year-over-year in August, while core PCE exclusive food and energy increased 2.9%.
The Data Report reinforced Fed’s tale of gradually facilitating the price pressure, said Fabian Dori, CIO in Sygnum Bank, but it also leaves decision makers who balancing sticky inflation with a softer labor market.
“For investors, the implications are two -part: If inflation trends are lower, risk assets may find support from confidence in Fed’s easing cycle,” he said. “But all upside -down surprises in upcoming data could push back on short -term interest rate reduction, which weighs on shares and increases the US dollar.”
Crypto mood is getting scared
Meanwhile, the feeling of crypto remained fragile. Fear & Greed Index, a good subsequent mood indicator, fell to 28 on Friday, its most depressed level since mid -April signaling “fear” among the traders. It reflects the recent volatility after Thursday’s liquidation wave of $ 1.1 billion wiped out geared long positions.
“In recent days, about $ 3 billion of geared lengths have been liquidated,” noted Matt Mena, strategist at Digital Asset Manager 21Shares. With excess leverage that largely flushed out, he said positioning is swinging to an extreme bearish, noticed MENA: Popular tokens like BTC, Sun and Doge now shows a long-term relationship of only one-to-nine.
It combined with the fear and greed index of Near Extremes Lows, “sets the scene for a potential short squeeze,” argued Mena.
Paul Howard, senior director of the trading company Wincent, did not share positive prospects and warned that the market could run lower before stabilization. He pointed to BTC dipped under the 100-day sliding average below $ 110,000, and the total crypto market capital slides under $ 4 trillion as a sign of weakness.
“The market is in a healthy correction without panic or significant uptick in volatility,” he said. “It is likely that we will be sanded in the coming weeks,” he adds that he is starting to question whether Krypto is revising record heights in 2025.
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