Bitcoin Rises to $85,500 After US PCE, Then Falls Back to $83,500 Ahead of Friday's Jobs

Flash in the pan. Bitcoin jumped to $85,500 on Wednesday after softer-than-expected US inflation. It fell back to around $83,500 on Thursday morning. Bond yields have not left their peak.

At the start of the week, short sellers were still paying to bet against him. Here is the update on the PCE, long rates and the thresholds to watch before American employment on Friday.

Bitcoin at $85,500 on PCE, then back to $83,700

The August PCE (the inflation index that the Fed tracks) stood at +3.4% over one year. Excluding food and energy, core inflation reached +3.0%. However, the market was expecting 3.7% and 3.3%.

In this context, the price of bitcoin immediately climbed to $85,500. The CME FedWatch tool then only gave a 37% chance of a Fed rate hike in October. The status quo stood at 62%.

September even aimed for a historic performance. Bitcoin posted +7.33% for the month on Wednesday morning. Enough to dethrone the September 2024 record by a hair.

But, unfortunately, the momentum did not last. By Thursday morning, BTC was back around $83,500, almost $2,000 below the previous day's peak. The price has been running for two weeks in a range of 82,000 to 85,000 dollars.

Long rates above 5.2%: the real ceiling of bitcoin

The ten-year US Treasury yield is hovering around 5.28%, after peaking at 5.3% on Wednesday. That at thirty also reaches 5.62%. Both are playing at their highest levels since 2002.

A risk-free investment that pays this much makes it more expensive to hold bitcoin, which pays no interest. And core inflation at 3.0% remains far from the Fed's 2% target. Hence long-term rates stuck at the ceiling. For an analyst cited by CoinDesk, only a lasting decline in this yield would give breathing space to the next rebound.

However, Asian technology stocks climbed on Thursday. They benefited from the prospects of Micron and the launch of Gemini 4 Argon at Google. On the other hand, bitcoin did not follow.

Bitcoin: supports, resistances and ETF flows before American employment

Immediate support lies between $83,000 and $83,400. Further down, buyers then have 82,000 then 80,000 dollars as nets. The resistance zone of $85,000 to $85,500 has just pushed the price back. Higher, September's high of $87,354 remains the ceiling.

US bitcoin ETFs took in $66 million on Tuesday, according to Decrypt. This is their ninth session in a row in the green. Over the entire series, collection reaches around $3.1 billion according to SoSoValue, but the daily pace is slowing down.

The derivatives tell the same story. Liquidations reached $197.8 million over 24 hours on Wednesday. Long positions represented 125.6 million. Open interest (the volume of contracts still in progress) fell by 49,000 BTC. FXStreet sees it as an orderly cleanup. The fear and greed index remains in the greed zone, around 71.

According to CoinDesk, CryptoQuant’s “bull score” is close to its ceiling. And the buyers who took bitcoin to its eight-month high are starting to ease up.

Bitmine's Tom Lee maintains a bull market is underway. According to CoinDesk, bitcoin signed its best quarter since 2024 and ether its best since 2021. ETH is trading around $2,670.

Next test Friday with the September American employment report. A strong figure would revive bets on a rate hike in December. CoinDesk now considers this deadline more likely than October.