Crypto Market Whipsawed by Inflation Data and Surging Oil Prices

Cooler-than-expected inflation data from the US government collided with surging oil prices on Wednesday, sending mixed signals to traders in the crypto market. Bitcoin and XRP pared back their gains after initially surging following the release of the core Personal Consumption Expenditures (PCE) price index.

The PCE price index rose just 0.2% in August, below the forecasted 0.3%, with the year-over-year reading at 3.0% versus the estimated 3.3%. Market commentator Bull Theory noted that the Bureau of Labor Statistics (BLS) changed its methodology for measuring advisory fees, software, and legal services, which analysts estimate cut up to 20 basis points off core PCE.

Despite this caveat, the cooler reading still had a significant impact on the crypto market. Bitcoin initially surged above $85,000 but settled back around $84,000 after failing to hold gains. XRP also gained, tagging $1.54 before being capped by its descending trendline.