BTC Edges Up, ETH Recovers Above $4K as Traders Shift into Fear Mode

Crypto Edges Higher Amid Inflation Data, But Fear Dominates Market – 27/9/2025

Crypto markets posted modest gains on Friday as inflation data came in line with expectations, though sentiment remained cautious. Bitcoin climbed back above $110,000 to $113,012.67, while Ethereum outperformed with a 3.8% rise to $4,107.93. Dogecoin added 3.4% to $0.2271, and Solana gained 2.5% to $205.44.

The U.S. Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, rose 2.7% year-over-year in August. Core PCE, excluding food and energy, increased 2.9%. Fabian Dori, CIO at Sygnum Bank, said the report reinforces the Fed’s gradual easing narrative but leaves policymakers balancing persistent inflation against a softer labor market. “Lower inflation could support risk assets through confidence in the Fed’s easing cycle, but any upside surprises may delay rate cuts, pressuring equities and strengthening the U.S. dollar,” he noted.

Fear and Volatility Persist in Crypto
Despite the gains, the Fear & Greed Index fell to 28, its lowest level since mid-April, reflecting heightened caution following Thursday’s $1.1 billion liquidation of leveraged long positions.

Matt Mena, strategist at 21Shares, highlighted that roughly $3 billion in leveraged longs have been liquidated recently, leaving market 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 conditions could favor a short squeeze.

Still, some analysts remain cautious. Paul Howard, senior director at trading firm Wincent, pointed to BTC falling below its 100-day moving average and the total crypto market cap dropping under $4 trillion as warning signs. “The market is undergoing a healthy correction without panic, but it may continue grinding lower in the coming weeks,” he said, questioning whether crypto will revisit 2025 record highs.