Newsletter

In August, the core PCE increased by 3.0% year-on-year, which is lower than the expected 3.3%; the overall PCE also rose by 3.4% year-on-year, but this was below the expected 3.7%. Currently, the market estimates that the probability of a rate hike in October is 34.9%.

Bitcoin once rose above $85,000, reaching a high of $85,598.94, before falling back to $84,376, with a daily increase of 0.9%. This is still within the range it has maintained since its September rise.

On the prediction market Myriad under Decrypt, traders believe that the probability of Bitcoin breaking through its historical high of $126,199 before 2027 is only 7%, and the capital inflow into ETF has significantly slowed down after reaching $2.4 billion in a single week.

Bitcoin has now achieved something that Wall Street is temporarily unable to do: remain calm.

The Fed's preferred inflation indicator, the PCE index, rose 0.3% month-on-month and 3.4% year-on-year in August, lower than economists' expectations of 0.4% and 3.7%. Excluding the more volatile prices of food and energy, the core PCE index rose 0.2% month-on-month and 3.0% year-on-year, also falling short of the expected 0.3% and 3.3%.

Bitcoin reacted accordingly, first rising above $85,000 to reach a high of $85,598.94, before then falling back to $84,376.09. The total market value of the crypto ecosystem increased slightly by 0.6%, remaining just below $3 trillion.

PCE Data has changed the market's discussions regarding the October meeting. CME FedWatch tools indicate that there is a 62% probability that the Federal Reserve will maintain interest rates unchanged, and a 37% probability of a 25-basis-point rate hike.

Recent bets on interest rate hikes have been weakening, which is beneficial for risk assets. Interest rate hikes mean an increase in borrowing costs across the economy, which typically drives up the dollar and raises yields on cash and government bonds. Lower interest rates tend to increase market liquidity, which usually means more funds flowing into investments such as Bitcoin.

However, the so-called "moderation" is also relative: a core inflation rate of 3.0% is still far higher than the Federal Reserve's target of 2%.

The yield on 10-year U.S. Treasury bonds rose to around 5.25% on Tuesday, reaching the highest level since 2002. The S&P 500 index fell 0.2% to 7,670.84 points, the Dow Jones Industrial Average fell 0.3%, and the Nasdaq Composite Index fell 0.1%. Due to the ongoing conflict between the United States and Iran disrupting transportation through the Strait of Hormuz, Brent crude oil broke through $100 on Monday before falling back to $96.16. Consumer confidence dropped to a 12-year low, and there were 7.08 million job vacancies in August, which was lower than expected.

Despite Bitcoin's strong performance, traders on the prediction market Myriad created by Dastan, the parent company of Decrypt, are not ready to celebrate a victory just yet. The market is wondering when a new high will be set, with a target of reaching the previous high of $126,199.63 set on Binance. The probability of Bitcoin achieving this goal before 2027 is only 7%. To do so, Bitcoin would need to rise by about 50% within three months.

However, traders currently estimate that the probability of Bitcoin remaining above $84,000 in the short term is 49%, and the probability of it rising above $86,000 is 21%.

Bitcoin Price: First soars high, then takes a breather

Today's daily session opened at $83,624.30, reached a high of $85,598.94, and then fell back to the current level of $84,376.09, an increase of $751.62 or 0.9% from the previous point.

This seems more like a pause after a vertical rally. Bitcoin once fell below $75,000 in mid-September, but then on September 21st, there was a large-scale influx of funds ETF – the largest single-day inflow so far in 2026 – and driven by a wave of short sellers closing their positions, it soared to $87,354, setting a new high since January.

Over the past week, Bitcoin has been fluctuating within a narrow range of around $82,600 to $85,600.

The Average Directional Index ( ADX ) is used to measure the strength of a trend, regardless of its direction. A reading above 25 generally indicates that a trend is in place. Currently, the BTC is at 41.9, which suggests that the trend is strong, and the positive trend line is higher than the negative trend line, indicating that buyers have the upper hand. However, the ADX has a lagging nature. It remains high because of the previous sharp upward movement; even if prices are now sideways, it may continue to stay high.

The Exponential Moving Average ( EMA ) assigns greater weight to recent prices and is used to track the average price. The 50-day EMA is at $77,809.88, which is higher than the 200-day EMA of $74,423.93. When the short-term moving average is above the long-term moving average, traders typically interpret this as a bullish trend. In September, the moving average bands on the chart turned from red to green, after which the BTC had been below the 200-day moving average from June to mid-August. Currently, the Bitcoin price is about 8% higher than the 50-day moving average, which is a relatively large deviation. Traders usually expect the price to revert to this moving average before the next round of upward movement.

The Relative Strength Index (RSI) is used to measure buying and selling momentum, with a range of 0 to 100. A value above 70 is generally considered overbought, while a value below 30 indicates oversold conditions. The current RSI is 63.4, which suggests that buyers are in the lead but have not yet exhausted their momentum. This means there is still room for further upward movement before a typical profit-taking phase occurs.

Overall, the technical aspects still indicate a positive trend and momentum, but there has been a stagnation below $85,599. Traders hope to see the daily closing price above this level, preferably also above $87,354, while at the same time ADX should remain above 25 to confirm the trend.

Inflation concerns have temporarily subsided for now, but problems in the bond market still exist. It is worth noting that the rise after the announcement of PCE stopped at $85,599, which is also the same resistance level that has been suppressing Bitcoin throughout this week. Moderate data provided a catalyst for the bulls, but it is not yet sufficient to drive a breakthrough.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.