US Core PCE Hits 2.9% in August, Boosting Bitcoin's Prospects

The US Core PCE Price Index hit 2.9% YoY in August, matching expectations. The broader PCE index climbed 2.7% YoY and 0.3% from the previous month. The data suggests price pressures are easing but not fully gone. The release landed at a tense moment for Bitcoin, with the market shaken by stronger US jobs data and robust GDP growth, leading to a nearly 4% tumble and over $1.5 billion in liquidations. Bearish voices predict a deeper correction, while some remain optimistic about Bitcoin's potential rebound.

The U.S. Core PCE Price Index hit 2.9% YoY in August, matching expectations, indicating that price pressures are easing but not fully gone. The broader PCE index climbed 2.7% YoY and 0.3% from the previous month How US Jobless Claims, GDP Growth, PCE Inflation Data Impact Crypto Market^[1].

The release landed at a tense moment for Bitcoin, with the market shaken by stronger U.S. jobs data and robust GDP growth. The U.S. jobless claims were reported lower than expected, declining to 218,000, compared to 235,000 forecasts. The U.S. real GDP increased by 3.8% in the second quarter on an annualized basis, compared to the anticipated growth rate of 3.3% How US Jobless Claims, GDP Growth, PCE Inflation Data Impact Crypto Market^[1].

These macroeconomic factors could weigh on the already fragile crypto market. The crypto market suffered another volatile day on Thursday, with traders absorbing robust-than-anticipated U.S. jobless claims data, GDP growth, and comments by Fed Chairman Jerome Powell. Meanwhile, CoinGlass data demonstrated that over $542 million leveraged positions were realized in 24 hours, with Ethereum, Bitcoin, and Solana topping the list of losers How US Jobless Claims, GDP Growth, PCE Inflation Data Impact Crypto Market^[1].

The decreasing number of jobless claims will lower the probability of forceful rate cuts, which usually restricts the inflows of speculative assets, including Bitcoin and Ethereum. The Federal Reserve’s favorite measure of inflation, the core Personal Consumption Expenditures (PCE) price index, was marked to 2.6% as compared to the 2.5% figure. Even an upward surprise of a small magnitude indicates that the market is not yet reducing inflation as fast as it had already postulated in the pricing of the market, leading to a higher-for-longer view that can deactivate excitement over high-beta markets, including crypto How US Jobless Claims, GDP Growth, PCE Inflation Data Impact Crypto Market^[1].

The latest Bitcoin price pullback toward $112,000 was likely a buy-the-dip opportunity with BTC set to recover, several key market metrics suggest. The Coinbase Premium Index, which measures the difference in pricing between the BTC/USD pair on Coinbase and Binance’s BTC/USDT equivalent, stayed positive despite the price dip. The index rose to 0.075 on September 22 from 0.043 on September 21, even as Bitcoin tumbled 4% to $112,000 Bought the dip? These metrics say $112K Bitcoin price was the local bottom^[2].

Institutional Bitcoin demand remains firm, evidenced by strong inflows into Bitcoin investment products. Data from CoinShares shows that institutional investors increased their exposure to Bitcoin investment products, which saw inflows of $977 million, making up more than 51% of the total inflows last week. US-based spot Bitcoin ETFs saw $876 million in net inflows last week Bought the dip? These metrics say $112K Bitcoin price was the local bottom^[2].

Despite sustained sell-side aggression on Binance derivatives since mid-July, Bitcoin has mostly held its ground within a tight $110,000–$120,000 range. The inability of the price to break significantly lower suggests that this flow is being absorbed, implying accumulation. Net Liquidations remain negative near −40M, reflecting ongoing long wipeouts and keeping downside pressure in place. Yet the Liquidation Intensity Z-Score (365d) is neutral/moderate, suggesting no cascade risk for further bearish pressure Bought the dip? These metrics say $112K Bitcoin price was the local bottom^[2].

While short-term volatility may persist, the underlying bid, possibly institutional, could make a sharp correction below this level increasingly unlikely. The strong U.S. data, moderate tones by Powell, and the continued ETF split kept the crypto markets flattened, with Bitcoin trading below $112,000 and Ethereum at less than $4,000 How US Jobless Claims, GDP Growth, PCE Inflation Data Impact Crypto Market^[1].