Major coins rallied on Wednesday after July consumer price index data indicated a slowdown in inflation. The global cryptocurrency market cap rose 3.9% to $1.1 trillion at press time.

Why It Matters: Among the major coins, $Ethereum(ETH.CC)$ led in gains — rising nearly 9% intraday, compared with $Bitcoin(BTC.CC)$'s 4% gains.

Risk assets shot up as data from the U.S. Labor Department indicated that headline CPI rose 8.5% in July compared with 9.1% in June. The number was below economist estimates of an 8.7% rise. At press time, the $S&P 500 index(.SPX.US)$ and $NASDAQ 100 Index(.NDX.US)$ futures rose 0.2% and 0.3%, respectively.

Wall Street is now anticipating a Fed pivot in September as pricing reflects a half-point increase. If inflation continues to drop, the bull-steepening trade will gain further momentum." 

- said Edward Moya, a senior market analyst with OANDA. 

Bitcoin might rally significantly if this broad risk-on rally continues.  The majority of the crypto space is still skeptical of the Bitcoin rebound that started in mid-June, but momentum traders may pounce on this opportunity if Bitcoin rallies above the $25,000 level. A Bitcoin breakout could target the $28,400 level initially." 

-said Moya, in a note seen by Benzinga. 

Cryptocurrency trader Michaël van de Poppe tweeted that the apex coin rejected resistance and expects some consolidation between the $23,200 and $23,400 levels to sustain support. He expects the trend to target the $27,000 to $28,000 levels.

The lower inflation number will "bode well" for cryptocurrencies, while the dollar index, a measure of the greenback's strength against a basket of six other currencies, was down immediately to channel support, noted trader Justin Bennett on Twitter. At press time, the dollar index was 0.05% higher at 105.25.

The ratio of Tether (USDT) on exchanges has risen from 19.7% in early May to 42% over three months. This can be an indicator that traders took profit as prices of cryptocurrencies rose or a "sign of a 2-year high in buying power, tweeted Santiment, an on-chain and social analysis platform.