Bitcoin Price Breaches $114K as ETF Inflows Hit 8-Week High

Market Overview - Bitcoin rebounded from a low of $110,714 to exceed $114,000, marking its highest level since August 24, according to CoinGecko data [1] - U.S. spot Bitcoin ETFs experienced inflows of $757.1 million on Wednesday, reaching an eight-week high, with total accumulations of $1.39 billion in September [1] Influencing Factors - The inflows into Bitcoin ETFs were significantly influenced by favorable PPI numbers, which exceeded expectations, as noted by an analyst from CryptoQuant [2] - Bitcoin's price surge past $113,000 is seen as a positive indicator, supported by a 6.60% increase in open interest to $43.3 billion and favorable funding rates [2] Capital Movement - While Bitcoin ETFs are seeing record inflows, Ethereum funds are experiencing a negative net flow of $668.72 million for September, indicating a capital rotation back into Bitcoin from Ether [3] - This shift is anticipated in light of the upcoming Fed rate cut decision on September 17 [3] Federal Reserve Context - Recent job data has pressured the Fed to consider interest rate cuts, despite core inflation remaining above 3%, complicating the central bank's dual mandate [4] - Investors are speculating on a potential larger-than-expected rate cut, which may be contributing to the inflows into Bitcoin ETFs [5] Rate Cut Expectations - Current market sentiment suggests a high probability of a 25 basis point rate cut, with some speculation around a possible 50 basis point cut, as indicated by CME's FedWatch tool [5] - Users of a prediction market have assigned an 80% chance to a 25 basis point rate cut by the Fed [5]