Bitcoin (BTC) dropped to new 21-month lows at $58,035 following high US Personal Consumption Expenditures (PCE) inflation data, which also unsettled stock markets. The price decline triggered over $600 million in crypto liquidations, with analysts suggesting further downside towards $55,000.
Bitcoin (BTC) dropped to $58,035, its lowest point since September 2024, following a surge in US PCE inflation to 4.1%. The news caused significant volatility in stock markets, with the Nasdaq 100 falling 2% in 30 minutes, and triggered over $600 million in crypto liquidations within an hour.
Bitcoin faces significant volatility this week with the release of May PCE inflation data on Thursday and a massive $10 billion Bitcoin options expiry on Friday. These events could trigger sharp price movements, amplified by dealer hedging and market liquidity.
April's PCE inflation hit 3.8% year-on-year, a two-year high, while core PCE remained at 3.3%. Bitcoin fell sharply after the report, influenced by the Federal Reserve's stance under new chair Kevin Warsh, who favors tight liquidity. The conflicting monthly and annual inflation data creates uncertainty for rate cuts and impacts Bitcoin's liquidity-driven market.
US inflation accelerated in March with core PCE rising 0.3% monthly and 3.2% annually, while overall PCE reached 3.5% year-over-year. The Iran war's impact on oil prices created new challenges for the Federal Reserve. GDP growth in Q1 2026 came in at 2%, up from 0.5% in Q4 2025 but below the 2.2% estimate.
