Bitcoin Drops 4% to $83,770 as U.S. Inflation Data Fuels Fed Rate Hike Fears

Bitcoin experienced a significant drop, sliding almost 4% to around $83,770 on March 28. This decline was triggered by the release of hotter-than-expected U.S. inflation data, which reignited market pressures. The Personal Consumption Expenditures (PCE) Index revealed that core inflation rose more than anticipated, fueling concerns that the Federal Reserve might tighten monetary policy further. This could potentially delay rate cuts or even bring rate hikes back into consideration.

February’s core PCE data showed a 0.1% increase above estimates for both monthly and yearly readings. This unexpected rise added to the growing anxiety in the market, which had already been unsettled by the upward revision of January’s figures. The Kobeissi Letter highlighted the situation, stating that “core inflation is back on the rise” and warning that this could lead to “the perfect recipe for stagflation in 2025.”

In response to the inflation data, traders reacted swiftly. Daan Crypto Trades noted that it would be “a volatile day,” while Michaël van de Poppe cautioned that if Bitcoin drops below $84K, it could test the $78K–$80K range. Other analysts, such as TheKingfisher, suggested that the current market action resembled a cooldown rather than a true breakdown. However, there was a consensus among analysts that if Bitcoin fails to hold the $84K support level, a deeper dip could follow, especially as the market approaches the challenging spring season.