Bitcoin pushed back toward the $85,000 area Wednesday after softer-than-expected U.S. inflation data eased pressure from a bond market that had become one of crypto’s biggest macro headwinds.
The Bureau of Economic Analysis said the PCE price index rose 0.3% in August, while core PCE, which excludes food and energy, increased 0.2%. The annual headline rate stood at 3.4%, while core inflation slowed to 3.0%. The report also included annual revisions reaching back to 2021, making comparisons with previously published figures less straightforward.
That distinction matters. Inflation did not suddenly collapse, but the monthly figures were soft enough to change the rate narrative at a moment when markets had been preparing for another potentially hawkish Federal Reserve decision.
Treasury Yields Give Bitcoin Room to Recover
The clearest reaction came from the bond market.
The 10-year Treasury yield fell from about 5.234% before the release to roughly 5.203%, while the two-year yield dropped from 4.881% to around 4.845%. Expectations for another Fed rate hike in October also declined after the data.
That is especially relevant for Bitcoin because Treasury yields had just climbed to levels last seen in 2007, creating unusually strong competition for risk assets. Bitcoin had been trading around $84,000 while those yields rose, leaving BTC caught between macro pressure and continued institutional demand. higher Treasury yields
The Report Was Not Entirely Dovish
There is still a reason Bitcoin’s reaction should not be treated as a clean macro breakout.
Consumer spending jumped 0.9% in August, while real PCE rose 0.6%, showing that demand in the U.S. economy remains strong. Strong spending can keep inflation sticky and gives the Fed less reason to rush toward easier policy.
Bitcoin therefore still faces the same tension that has shaped the market throughout September: improving institutional demand against restrictive financial conditions.
U.S. spot Bitcoin ETFs attracted another $31 million in the latest completed session after bringing in roughly $2.39 billion the previous week. ETF buying $2.39 billion in weekly inflows.
