Bitcoin Holds $118K as Ether and Dogecoin Lead Gains on Rate Cut Optimism

Despite the market upheaval, Bitcoin (BTC) remained steady at $118k during Wednesday’s Asian trading session. The premier cryptocurrency is holding its ground after the U.S. inflation data for June revealed further disinflation. This has reignited market speculation about a possible Federal Reserve interest rate cut in September. According to the U.S. Consumer Price Index (CPI), the core CPI rose just 0.1% month-over-month for the fifth consecutive time this year.

This continuous deflation has renewed crypto investor optimism across crypto markets, even though broader equity markets showed signs of weakness.

Bitcoin Holds on While Market Sentiment Improves

Eugene Cheung, Chief Commercial Officer at OSL, said, “The data was bullish for crypto, as the Fed may be more likely to cut interest rates in September, potentially triggering more capital to flow into the crypto industry.” He added that Bitcoin’s resilience reflects continued trader confidence, even after a setback for crypto-related legislation in Washington.

The GENIUS Act, a bill critical to digital asset regulation, failed to pass a procedural vote earlier this week, sparking a dip in some crypto-related stocks. However, market watchers remain optimistic as lawmakers continue refining the bill ahead of another round of voting.

Ether (ETH), on the other hand, led the market gains and got back to the $3,100 milestone.  Analysts say the rise is due to new money coming into spot ETH exchange-traded funds (ETFs) and the recent passing of a measure that regulates stablecoins.  People think the bill is good for Ethereum because it strengthens its position as a key platform for tokenized dollar infrastructure.

Dogecoin (DOGE) also did well, rising 2.7% on the day to stay around 19 cents.  The meme-inspired cryptocurrency's weekly gain grew to over 15%, thanks to the good mood in the rest of the market.

Other big altcoins did well overall, but their performance was uneven. Solana (SOL) stayed at $163, XRP stayed near $2.92, and Binance Coin (BNB) traded around $688. TRON (TRX) stayed at about 3 cents, showing that the market is cautious yet stable.

More and more institutions are interested in digital assets. U.S. spot Bitcoin ETFs recorded their ninth consecutive day of net inflows, with $403 million added on Tuesday alone. Notably, BlackRock’s IBIT fund attracted $416 million in new investments, more than compensating for combined outflows from rival ETFs including GBTC, FBTC, and ARKB, according to data from SoSoValue.

On the macroeconomic front, Asian equities declined, and U.S. equity futures slipped as investors recalibrated expectations regarding the timing and pace of future rate cuts. While inflation has cooled, some companies are reportedly passing new tariff-related costs to consumers, adding to market uncertainty.

Dallas Fed President Lorie Logan struck a cautious tone, stating that the Federal Reserve may still need to keep interest rates elevated unless labor market conditions or inflation show further weakening.

Despite these macro headwinds, many in the crypto sector remain optimistic. Nick Ruck, Director at LVRG Research, said, “Despite a temporary setback for the GENIUS Act, Bitcoin has been able to maintain a solid position at around $118,000. We remain positive that the current bull run still has much runway left to see higher prices in the second half of the year.”