Crypto Rebounds Slightly as Inflation Data Meets Expectations, But Fear Persists – 27/9/2025
Crypto markets edged higher on Friday, with Bitcoin reclaiming $110,000 to reach $113,012.67, while Ethereum outperformed with a 3.8% gain to $4,107.93. Dogecoin rose 3.4% to $0.2271, and Solana added 2.5% to $205.44.
The modest recovery came as U.S. inflation data landed in line with forecasts. The Federal Reserve’s preferred gauge, the Personal Consumption Expenditures (PCE) index, increased 2.7% year-over-year in August, with core PCE (excluding food and energy) up 2.9%.
Fabian Dori, CIO at Sygnum Bank, noted that the data supports the Fed’s narrative of gradually easing price pressures but leaves policymakers balancing persistent inflation against a softening labor market. “If inflation trends lower, risk assets may benefit from confidence in the Fed’s easing cycle. But any upside surprises could delay rate cuts, weighing on equities and supporting the U.S. dollar,” he said.
Crypto Sentiment Remains Weak
Despite the rebound, market sentiment remains fragile. The Fear & Greed Index dropped to 28, its lowest level since mid-April, reflecting lingering trader caution after Thursday’s $1.1 billion liquidation of leveraged long positions.
Matt Mena, strategist at digital asset manager 21Shares, highlighted that roughly $3 billion of levered longs have been liquidated recently, leaving positioning extremely bearish. “Popular tokens such as BTC, SOL, and DOGE now show a long-to-short ratio of just one-to-nine,” he said, adding that the setup could create conditions for a potential short squeeze.
However, caution remains. Paul Howard, senior director at trading firm Wincent, warned that crypto could drift lower before stabilizing. He pointed to BTC dipping below its 100-day moving average under $110,000 and the total crypto market cap sliding under $4 trillion as signs of weakness. “The market is in a healthy correction without panic or a spike in volatility. We are likely to grind lower in the coming weeks,” he said, questioning whether crypto will revisit 2025 record highs.
