Bitcoin’s Price Jumps Above $85,000 on Lighter-Than-Expected Inflation Data
Bitcoin Magazine Bitcoin’s Price Jumps Above $85,000 on Lighter-Than-Expected Inflation Data The August personal consumption expenditures price index came in lower than expected and bitcoin’s price j...
The August personal consumption expenditures price index came in lower than expected and bitcoin’s price jumped — a little.
Bitcoin’s price rose — albeit slightly — on data Wednesday showing that inflation had risen slower than expected.
The Fed’s main inflation gauge, the personal consumption expenditures price index, increased in August by 3.4% on headline and 3% for core — both well below estimates.
Bitcoin’s price recently stood at $84,246 after jumping as high as $85,518 at one point Wednesday morning in New York.
The news means the Federal Reserve is less likely to hike interest rates in October. High inflation is causing the U.S. central bank to take a more hawkish approach to managing monetary policy.
In his first speech since he became Fed chair, Kevin Warsh in August said the U.S. central bank had “more work to do” to fight inflation.
Then, in September, the bank raised interest rates. “The plain fact is that inflation is too high, and has been for too long,” Warsh said at the time.
Still, bitcoin’s price appeared to shrug off the move and had a good run in the week following the central bank’s move.
The coin surged as high as $87,158 earlier this month. Some analysts have said that investors are shrugging off the move as they don’t expect the Fed to change policy and start hiking rates successively.
Bitcoin has rallied since the U.S. Treasury announced plans to more than double the size of its government debt repurchases.
JUST IN: 🇺🇸 US Treasury Department to buy back up to $6 billion in longer-term debt AGAIN tomorrow 👀Buy Bitcoin 🚀 pic.twitter.com/0fc6V7u4oH
Bitcoin’s price has in the past performed well in a low interest rate environment, along with other “risk-on” assets.
U.S. President Donald Trump has repeatedly put pressure on the Federal Reserve to lower interest rates.
Last year, Trump threatened to fire ex-Fed Chair Jerome Powell and said he did a “bad job” for not lowering interest rates.
Asanat Analysis — Why it matters
Bitcoin's move above $85k on softer PCE data reflects the asset's sensitivity to monetary policy expectations. Lower inflation readings typically signal less aggressive Fed rate trajectory, which reduces opportunity cost of holding non-yielding assets and increases relative appeal of hard-money narratives. This pattern has held consistently since 2020, though the relationship weakens during risk-off regimes when macro factors override inflation prints.
The timing matters: PCE data directly influences Fed forward guidance and options markets pricing, which cascade into leveraged trading positions and institutional positioning. A sustained move above $85k would test resistance levels that historically trigger both stop-loss unwinds and momentum accumulation, depending on volume profile. This also signals market conviction that disinflation narratives are holding despite recent labor market volatility—a prerequisite for the 'easing cycle' that crypto investors have been pricing in since mid-2024.