Bitcoin Stalls at $85,000 as Sellers Maintain Strong Resistance

Bitcoin has struggled to break above $85,000 despite reaching that level briefly following a cooler-than-expected inflation report. The asset's price fluctuated between $85,518 and $82,951 over the last day, leaving it about 33% below its all-time high of $126,080.

The core PCE index rose only 0.2% in August, below the expected 0.3%, which led to a decrease in the probability of an October rate hike from around 70% to about 35%. This news was supportive for Bitcoin as traders tend to believe that lower inflation makes it less costly for holders to choose Bitcoin over bonds.

However, higher Treasury yields and a recent Fed rate hike have kept potential buyers hesitant. The 10-year Treasury yield was around 5.17%, close to its highest level since 2007, making an investor earn about $5,170 annually from a $100,000 investment in government bonds while Bitcoin earns no interest.

Many investors who bought near the $85,000 mark are now selling to recoup their investments, creating a strong layer of sell orders at that level. This is often referred to as resistance and has been a key factor in Bitcoin's inability to break above $85,000.