Bitcoin Stalls at $85,600 as PCE Inflation Data Raises Questions
Bitcoin's price has stalled at $85,600 after a lower-than-expected US inflation reading. The Personal Consumption Expenditures (PCE) price index came in at 3.4% year-on-year, versus expectations of 3.7%. However, methodology changes affecting the PCE reading may have complicated its interpretation.
The Federal Reserve's preferred inflation gauge was revised downward by up to 20 basis points due to these changes. Market commentary publication The Kobeissi Letter noted that July headline and core PCE inflation had also been revised downward by 30 basis points, suggesting markets would 'heavily discount' the August reading.
Despite this, Bitcoin's price has risen 35% from its August low. However, its coin-denominated open interest has fallen almost 20%, making it less susceptible to leverage flushes. Glassnode highlighted a divergence between Bitcoin's price and BTC-denominated open interest.