Bitcoin’s post-PCE jump above $85,000 faded as U.S. Treasury yields remained elevated, keeping pressure on the cryptocurrency despite signs of softer inflation.
BTC was up 0.4% at around $83,700 during Thursday’s Asian morning trading. The cryptocurrency surged to roughly $85,500 on Wednesday after the August PCE report came in below expectations, but the move lost traction as Treasury yields held near their highest levels since 2002.
HYPE led the major tokens, gaining 3% to approximately $89. DOGE added nearly 2% to trade just below 10 cents. Ether, BNB, TRX and ZEC each rose less than 1%, while XRP remained around $1.50. SOL fell nearly 1% to just under $119, according to CoinDesk data.
Cooler Inflation Shifts Fed Expectations
The August PCE figures provided some relief on the inflation front. Prices rose 3.4% year over year, while the core measure, which excludes food and energy, increased 3.0%.
Dan Khus, chief analyst at LVRG Research, said the data reduced expectations for another Federal Reserve rate increase in October, while making a December move appear more plausible.
“August’s PCE report showed inflation cooling more than expected, with prices up 3.4% from a year earlier and 3.0% excluding food and energy, which has reduced the odds of another Federal Reserve rate increase in October and made December look like the more likely next move,” Khus said in an email to CoinDesk.
The report initially boosted demand for risk assets and helped bitcoin reclaim the $85,000 level.
“Crypto markets took that as a relief signal, and bitcoin jumped back above $85,000 as bond yields slipped and investors became more willing to buy risk assets again,” Khus said.
Bond Market Limits Risk Appetite
The improvement did not last as Treasury yields regained ground during late U.S. trading.
The 10-year Treasury yield stood near 5.28%, close to Wednesday’s high. The 30-year yield held around 5.62% after reaching its highest level since 2002 during the New York session.
Oil prices moved lower, helping moderate the bond-market selloff, while the U.S. dollar strengthened.
Risk appetite was firmer in Asia. Nasdaq 100 futures rose 0.8%, and S&P 500 futures gained 0.4%. Japan’s Nikkei advanced 2.7%, while South Korea’s Kospi climbed 1.2% after Micron Technology issued an upbeat forecast that lifted semiconductor stocks.
Alphabet rose 1.5% in extended trading as Google began deploying Gemini 4 Argon, its latest flagship AI model.
Lower Yields Remain Key for Bitcoin
Bitcoin’s inability to hold the $85,000 threshold despite the softer inflation data underscores the importance of the bond market for the current setup.
The 10-year Treasury yield remained near 5.3%, preventing Wednesday’s inflation-driven bitcoin advance from extending.
For the move above $85,000 to become more durable, a sustained decline in long-term Treasury yields would give risk assets greater room to maintain their gains.
