Live: Bitcoin Reclaims $84K After Giving Back Early Gains

Bitcoin briefly surged above $85,500 after softer-than-expected August U.S. inflation data, but the move quickly faded, with the cryptocurrency returning to around $84,000 less than two hours later.

Core PCE prices increased 0.2% in August, below the 0.3% economists had expected. On an annual basis, core PCE rose 3%, also below the 3.3% forecast.

Bitcoin initially gained more than 2% in the minutes after the government released the PCE report. The rally pushed BTC above $85,500 before leveraged short positions were squeezed and the price subsequently returned to its pre-data level near $84,000.

U.S. equities did not experience the same reversal. The Nasdaq climbed more than 1% to a session high, while Treasury yields moved modestly lower.

Chicago PMI beats expectations

The Chicago PMI jumped to 58.8 in September from 47.1 in August, substantially exceeding economists’ forecast of 51.2.

The regional manufacturing reading came as markets began giving back some of the immediate gains sparked by the PCE inflation report roughly 90 minutes earlier.

The 10-year U.S. Treasury yield was down 1.2 basis points at 5.248%, while bitcoin traded around $84,550, roughly $1,000 below its post-PCE peak.

October Fed hike bets fall below 50%

Traders had already reduced expectations for an October Federal Reserve rate hike following a dovish speech Wednesday from New York Fed President John Williams.

Softer-than-expected inflation data prompted another reduction in those bets. CME FedWatch data showed the probability of a rate increase at the Fed’s Oct. 28 meeting falling to 47.1%, compared with 70% roughly 48 hours earlier.

The Bureau of Labor Statistics, which compiles the PCE price data released Wednesday, also changed the methodology used to measure certain components of the inflation gauge. Some market participants suggested the methodological change could have contributed to the softer reading.

Bitcoin rises as Treasury yields retreat

Bitcoin climbed about 1% to $84,750 shortly after the August PCE report showed inflation running below economists’ expectations.

The 10-year Treasury yield fell 4.2 basis points to 5.218%, while the two-year yield declined 2.1 basis points to 4.868%. U.S. stock index futures were also higher by around 0.4%.

The broader PCE report showed headline prices rising 0.3% in August, up from 0.1% in July but below the 0.4% forecast. Year over year, PCE inflation was 3.4%, unchanged from July and below the 3.7% estimate.

Core PCE, which excludes food and energy, increased 0.2% from July and was up 3% annually. Both readings were below economists’ expectations of 0.3% monthly growth and 3.3% annual growth.

Private-sector hiring beats forecasts

The U.S. private sector added 90,000 jobs in September, according to ADP’s employment report, compared with 36,000 in August and economists’ forecast of 70,000.

Markets were also awaiting the government’s September employment report, scheduled for Friday.

Real yields remain a bitcoin headwind

Bitfinex analysts identified inflation-adjusted U.S. Treasury yields as a key headwind for bitcoin.

The 10-year real yield increased to 2.83% from 2.68% during the week through Sept. 25. Higher real yields increase the opportunity cost of holding assets such as bitcoin and gold because those assets do not generate a comparable yield.

Multicoin Capital invests in Grass

Multicoin Capital has invested in Grass, a platform described as a “read layer” for machine intelligence, through both its hedge fund and venture fund.

According to the announcement, Grass has demonstrated commercial viability by generating substantial revenue and reaching profitability after initially supplying pretraining data to leading AI labs through millions of residential connections.

Multicoin said it sees Grass as potential infrastructure for autonomous AI agents through specialized search and content APIs designed to provide recurring, real-time context retrieval during inference.

S&P 500 market breadth deteriorates

Only 25% of S&P 500 stocks were trading above their 50-day moving averages, the lowest share since April 2, according to The Kobeissi Letter.

That represents a significant decline from the 70% recorded in mid-August, indicating a deterioration in the breadth of the equity market.

The crypto market, meanwhile, remained comparatively resilient.

Bitcoin and gold await inflation data

Before the PCE release, bitcoin and gold were both modestly higher. Bitcoin traded around $83,700, while gold was just below $4,200 an ounce.

The PCE report was the day’s key U.S. macroeconomic event because it is the Federal Reserve’s preferred inflation measure. Core PCE had been expected to rise 0.3% month over month and 3.3% year over year, while GDP growth was forecast at 1.5% quarter over quarter.

Markets had priced a 57% probability that the Fed would leave rates unchanged at its Oct. 28 meeting.

Standard Chartered sets $2 ENA target for 2028

Standard Chartered initiated coverage of Ethena’s ENA token with a $2 price target for the end of 2028, representing an increase of nearly 670% from its market price of about 26 cents at the time.

The bank cited rising demand for yield-bearing stablecoins and the expansion of tokenized assets across decentralized and traditional finance. It also pointed to the rapid growth of Ethena’s USDe stablecoin, which reached a $10 billion market capitalization during its first nine months.

Standard Chartered highlighted Ethena’s buyback-and-burn program and projected that USDe supply could reach $40 billion by 2028. Slower adoption and weaker growth in real-world assets were identified as potential risks.

Gold faces $4,200 technical test

Gold was trading near $4,200 an ounce, with Simon-Peter Massabni, head of business development at XS.com, identifying that level as an important point between buyers supporting the broader uptrend and sellers anticipating a deeper pullback.

Massabni said a daily or four-hour close above $4,200 would be needed to confirm another upward move.

Near term, Federal Reserve policy remains a key factor for gold. Because the metal does not pay interest, expectations for persistently high rates can make it less attractive compared with bonds and cash.

A stronger-than-expected PCE reading could therefore lead to another round of short-term selling pressure, according to Massabni.

Attention will then shift to the monthly U.S. employment report. A weaker-than-expected jobs reading could reduce expectations for additional rate increases.

Bitcoin rally loses momentum

Before the inflation report, bitcoin had slipped 0.3% to around $83,700 as traders awaited the PCE data.

A stronger inflation reading had been expected to reinforce rate-hike expectations that contributed to the bond market’s recent selloff. Brent crude had climbed above $103 a barrel and was up about 14% for September, despite Middle East crude flows returning to pre-war levels.

Treasury markets stabilized after 30-year yields reached their highest level since 2002, while the dollar remained close to its highest level since July.

Ether fell 0.7% to approximately $2,690. HYPE declined nearly 2%, making it the weakest major cryptocurrency, while XRP and TRX each gained less than 1%, according to CoinDesk data.

CryptoQuant estimated that bitcoin spot demand had declined by roughly 170,000 BTC over the previous 30 days. Growth in futures demand had also fallen 90% since Sept. 14.

Micron Technology was scheduled to report earnings after the U.S. market close, with its results expected to provide another test for AI-related stocks that had helped limit S&P 500 losses during the bond market selloff.

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