Crypto Rebounds Slightly as Inflation Holds Steady, But Fear Persists – 27/9/2025
Crypto markets posted modest gains on Friday following U.S. inflation data that met expectations, though sentiment remains fragile. Bitcoin rose to $113,012.67, reclaiming the $110,000 level, while Ethereum outperformed with a 3.8% gain to $4,107.93. Dogecoin climbed 3.4% to $0.2271, and Solana added 2.5% to $205.44.
The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, increased 2.7% year-over-year in August, while core PCE, excluding food and energy, rose 2.9%. Fabian Dori, CIO at Sygnum Bank, said the data supports the Fed’s narrative of gradually easing price pressures but leaves policymakers balancing sticky inflation against a softer labor market. “If inflation trends lower, risk assets may benefit from confidence in the Fed’s easing cycle. However, any upward surprises could delay rate cuts, pressuring equities and boosting the U.S. dollar,” he said.
Crypto Sentiment Remains Cautious
Despite the rebound, the Fear & Greed Index fell to 28, its lowest since mid-April, reflecting ongoing caution after Thursday’s $1.1 billion liquidation wave that wiped out leveraged long positions.
Matt Mena, strategist at 21Shares, noted that roughly $3 billion in leveraged longs have been liquidated recently, leaving positioning extremely bearish. “Popular tokens like BTC, SOL, and DOGE now show a long-to-short ratio of just one-to-nine,” he said, adding that this could set the stage for a potential short squeeze.
Still, some analysts are wary. Paul Howard, senior director at trading firm Wincent, highlighted BTC dipping below its 100-day moving average under $110,000 and the total crypto market cap falling under $4 trillion as signs of weakness. “The market is in a healthy correction without panic, but it may continue grinding lower in the coming weeks,” he said, questioning whether crypto can revisit 2025 record highs.
