On Friday, September 27, cryptocurrencies, stocks, and other high-risk assets received a significant boost due to the release of favorable inflation data by the U.S. government, which stirred optimism among investors.

US PCE Inflation Decline in August

Bitcoin (BTC) maintained a strong position above $65,000, while a variety of altcoins, including Wormhole (W), Floki (FLOKI), Pepe (PEPE), and Shiba Inu (SHIB), surged by over 15%. In addition, futures contracts associated with the Dow Jones, S&P 500, and Nasdaq 100 experienced an increase of more than 25 basis points.

According to recent data from the government’s statistics agency, the personal consumption expenditure (PCE) inflation rate decreased from 0.2% in July to 0.1% in August, which was lower than the anticipated rate of 0.2%. Year-over-year, the PCE also reduced, falling from 2.5% to 2.2%, marking the lowest inflation level observed in more than two years.

Focusing on core PCE—which excludes the often volatile food and energy categories—the rate similarly fell from 0.2% to 0.1% during August. These figures suggest that the Federal Reserve is increasingly edging closer to its inflation target of 2.0%. Consequently, it is likely that the Fed will proceed with further interest rate reductions in its final two meetings of the year, especially given that the unemployment rate remains above 4%. In fact, the Fed had already cut rates by 0.50% in its last meeting, indicating a clear dovish stance.

Central banks around the globe, including the Swiss National Bank, the European Central Bank, and the Bank of England, have also adopted a more dovish tone, echoing the Fed’s approach. Historically, cryptocurrencies such as Bitcoin, Ethereum, and Shiba Inu have shown positive performance during periods when the Fed is actively cutting interest rates, and market analysts are keeping a close watch on potential trends that may emerge in the coming months.

Additionally, news from China, the world’s second-largest economy, has further contributed to this bullish sentiment. This past Tuesday, China’s central bank initiated a key interest rate cut and lowered reserve ratios, a strategy designed to inject over $100 billion into the market for stabilizing stock prices. Furthermore, Beijing is contemplating an additional stimulus package surpassing $150 billion, which could provide even more impetus for recovery.

CZ is being released from jail

FTX is giving people back $16 billion

Donald Trump is gonna fire Gary Gensler

Companies are hoarding bitcoin

Banks are creating bitcoin accounts

Institutions are max bidding

Lower interest rates and printing money

Governments mining and…

— Crypto Tea (@CryptoTea_) September 27, 2024

The Release of Changpeng Zhao

The rise in prices for Bitcoin, Wormhole, and Pepe was also fueled by the anticipation surrounding Changpeng Zhao’s release from detention. Zhao, the founder of Binance, had been serving a four-month prison sentence following a settlement agreement with the U.S. government.

Along with serving time, Zhao faced a hefty fine of $50 million and was required to relinquish his position as CEO of Binance. The company itself was levied a staggering $4.3 billion in penalties, underscoring the extent of regulatory scrutiny within the cryptocurrency space.

Market analysts are optimistic that Zhao’s release will catalyze further price increases for cryptocurrencies. In a recent post on X, Ki Young Ju, the CEO of CryptoQuant, expressed his belief that the cryptocurrency market could “skyrocket” following Zhao’s release. Another notable analyst, Adrian Zdunczyk, who boasts over 600k followers on X, speculated that traders would begin driving prices higher once Zhao is out of custody.

Zhao’s timely release coincided with a growing wave of positivity in the cryptocurrency market, as Bitcoin appeared poised for a technical bull run.

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