Bitcoin Retreats Slightly but Analysts See Continued Rally Ahead

Bitcoin's recent price action has been characterized by a slight pullback after hitting its long-dated target of $85,000. This is a normal profit-taking move, and analysts believe that the rally will continue despite this retreat.

The upcoming inflation data release in the United States on Wednesday will be crucial in determining the market's next move. The PCE Index for August is expected to show a monthly variation of 0.4%, while quarter-on-quarter GDP growth in Q2 is predicted to decelerate to 1.5%.

If inflation levels exceed expectations, it could intensify the pullback and increase the odds of a rate hike during the next FOMC meeting in October. Currently, these odds stand at 68%, according to data from FedWatch.

Despite this risk, exchange-traded funds (ETFs) linked to Bitcoin have continued to attract positive inflows, with nearly $3 billion poured into these vehicles over a short period. This indicates that Wall Street remains bullish on the current rally.