Bitcoin Price Fails to Hold Gains Above $85K After PCE Data Release

Bitcoin's price briefly touched $85,500 on Wednesday morning following the release of lower-than-expected U.S. PCE inflation data for August. However, this short-lived pump was quickly erased by a sell-off, leaving the cryptocurrency marginally higher just hours before September comes to a close.

The rally appeared to have been sparked by the slower-than-expected price increases in August, which some analysts believe may give the Federal Reserve 'time to await more data' and potentially pass on another rate hike. According to Sal Guatieri, a senior economist at BMO Capital Markets, 'the less-than-feared price data for August may buy the Fed time to await more data and pass on October 28, but still-elevated inflation and a resilient consumer and economy point to another rate hike by year-end.'

A second rate hike would likely put Federal Reserve Chair Kevin Warsh at odds with the Trump administration, capping the upside potential of risk assets like Bitcoin. Some chart analysts, including Ted Pillows, project a further price drop before the next leg up.