Bitcoin Sees Boost as Inflation Data Falls Below Expectations
Bitcoin reacted positively to the recent inflation data release from the Federal Reserve. The PCE index rose 0.3% in August and 3.4% from a year earlier, below economists' expectations of 0.4% and 3.7%, respectively. This has caused a shift in market expectations, with CME's FedWatch tool now showing a 62% chance the Federal Reserve holds rates and a 37% chance of a 25-basis-point hike.
Bitcoin price surged above $85,000 to a high of $85,598.94 before easing back to $84,376.09. The total market capitalization of the crypto ecosystem is up 0.6%, just below $3 trillion. Despite this, traders are not ready for a victory lap, with only 7% odds that Bitcoin reaches a new all-time high before 2027.
The technical picture leans bullish on trend and momentum but is stalling under $85,599. Traders would want daily closes above that level, and ideally above $87,354, with the Average Directional Index (ADX) staying north of 25 for confirmation. The inflation scare is off the table for now, but the bond market's problem isn't.