Crypto Market Pulse - September 01, 2025

LAST WEEK RECAP:

Last week, markets faced conflicting signals: inflation readings remained stubbornly above target while Fed rhetoric turned more dovish. CPI, Core CPI, and Core PCE all hovered around 3%, suggesting inflation is proving stickier than anticipated. At the same time, producer prices accelerated to 3.3% YoY, reinforcing concerns that cost pressures are broad-based.

Powell’s Jackson Hole remarks nonetheless leaned toward easing, with the Fed acknowledging softening labor and growth dynamics. Rate-cut expectations rose sharply, sparking volatility across equities, bonds, and currencies as the yield curve flattened. In crypto, the week saw a sudden “flash crash” after a whale dumped 24,000 BTC, wiping out over $800M in leveraged positions. Bitcoin briefly plunged to approximately $ 110,500, with Ethereum falling to around $ 4,400, before stabilizing as buyers re-entered.

Overall, the setup reflects a market caught between sticky inflation pressures and growing anticipation of policy easing. Macro volatility is likely to stay elevated as investors reconcile these opposing forces. For cryptocurrency specifically, structural flows and institutional adoption remain supportive; however, positioning is fragile, and sudden liquidity shocks may continue to emerge. In this environment, short-term dips are likely to attract buyers, while the medium-term outlook stays constructive.

Looking forward, attention will turn to September’s macro catalysts: U.S. labor data on September 6, CPI and PPI prints in mid-month, and the FOMC meeting on September 17–18, all of which could redefine the Fed’s policy path. On the crypto side, Ethereum ecosystem upgrades, L2 adoption, and ETF flow dynamics will be closely watched as investors weigh capital rotation opportunities beyond Bitcoin.

• U.S. headline CPI nowcast at ~2.9% YoY, core CPI at ~3.0%; Core PCE ~2.9% YoY, all above the Fed’s 2% target.
• Federal Reserve officials signaled support for rate cuts despite sticky inflation, citing cooling growth and softer job data.
• U.S. PPI for July rose sharply to ~3.3% YoY, the highest in years.
• Powell’s Jackson Hole speech marked a dovish pivot, shifting expectations toward rate cuts and flattening the yield curve.
• A crypto “flash crash” occurred after a BTC whale sold 24,000 BTC, triggering approximately $838 million in liquidations; Bitcoin fell to around $110,500, and Ethereum to around $4,400.

BTC WEEKLY VIEW

BTC broke below the 120k resistance-turned-support last week, keeping the broader trend to the downside with the next support near 103k. The short-lived topping phase makes a sharp capitulation less likely, pointing instead to more measured declines. Investor sentiment has turned cautious, with risk appetite fading, though oversold conditions could later trigger sharper rebounds.

ETH WEEKLY VIEW

ETH broke below a short-term upward trendline, but the downside momentum in this pullback has not been particularly strong. The move looks more like a correction following the recent top, or potentially the early stages of forming a broader topping pattern. This suggests that while the immediate pressure points lower, the market is not yet displaying the kind of aggressive selling that typically accompanies a full bearish breakdown.

ETH/BTC

ETH/BTC continues to show relative strength in favor of ETH, suggesting that while BTC may extend its decline toward deeper support levels, ETH is more likely to consolidate sideways in the near term.

TOTAL3 USD MARKET STRENGTH

Total3 has been trading in a highly indecisive manner, consolidating just below a key supply zone. In the short term, price action is shaping into a potential flag formation, suggesting that a breakout on either side could trigger a meaningful move. This prolonged sideways action has built up latent momentum, which may be released once the range resolves.

TOTAL3 BTC MARKET STRENGTH

On the relative side, Total3/BTC has shown signs of stalling, with price failing to gain meaningful traction despite trading on comparable volumes. This divergence suggests that broader altcoin performance remains muted versus BTC, reflecting a lack of strong capital inflows into the space. The muted response highlights lingering caution in the market, with participants hesitant to rotate aggressively into higher-beta assets until clearer directional signals emerge.

MARKET LEVERAGE RATIO

The failure to hold above this level indicates weak capital inflows and a cooling appetite for leverage, which keeps pressure on risk assets. As investors reduce exposure and rotate into stable holdings, pressure on risk assets is likely to persist in the short term. Sentiment remains neutral to bearish, and caution is advised.

SUMMARY

• Inflation remains sticky (~3%), but dovish Fed signals push rate-cut expectations and market volatility.

• BTC and ETH saw a sharp flash crash on a whale sell-off; positioning, fragile but structural flows remain supportive.

• Sep 6 labor data, mid-Sep CPI/PPI, Sep 17–18 FOMC, plus ETH upgrades, L2 adoption, and ETF flows—could drive both macro and crypto moves.

DISCLAIMER:

The information in this report is for information purposes only and is not to be construed as investment or financial advice. All information contained herein is not a solicitation or recommendation to buy or sell digital assets or other financial products.

This post was prepared by Kairon Labs Traders Patrick Li and Travis Su.

Edited by: Shirley Castro