U.s. Core Pce Hits 2.9% In August, Matches Expectations – Does This Clear The Path For Bitcoin?

What Happened

With the Fed already delivering a 25-basis-point rate cut last week and investors eyeing further easing into October, optimism lingers that Bitcoin could still benefit from Q4’s historically bullish seasonality.

Market Context

The U.S. Core PCE Price Index, the Federal Reserve’s preferred inflation gauge, came in at 2.9% year-over-year for August 2025, in line with market forecasts.

The broader PCE index, which includes food and energy, climbed 2.7% year-over-year and 0.3% from the previous month, suggesting price pressures are easing but not fully gone.

For Bitcoin, the release lands at a tense moment. The market has already been shaken by stronger U.S. jobs data and robust GDP growth, which has pushed the dollar higher and has sent BTC tumbling nearly 4% while triggering over $1.5 billion in liquidations.

The question now is whether cooling inflation can restore confidence and reopen the path toward new highs, or if macro and geopolitical tensions will cement fears of a bull market peak.

Market Impact of PCE Inflation Gauge on Bitcoin and Risk Assets

Crypto research firm Bull Theory struck an optimistic tone, suggesting Bitcoin and the crypto market could be setting up for a rebound.

Recent tariff measures, which many feared might spark supply-side inflation, appear to have had little impact so far, providing relief for markets that had braced for worse.

“We’re still seeing the consumer moving on,” said Jennifer Lee, senior economist at BMO Capital Markets, commenting on the PCE release.

Market odds of another rate cut in October have ticked higher, moving from 75.5% just a day ago to nearly 81% now.

Analysts at London Crypto Club believe the equities market will push higher into late November while Bitcoin and crypto digest supply and consolidate, and are primed to reach new record highs following that period.

They urged the crypto community not to get shaken out by the market-wide liquidations, adding that “If you have the cash, these are the dips we pray for.“

The price is consolidating just above $109,500 after a steep drop, but the market remains capped below key resistance levels.

The $112,289 level stands out as the next upside liquidity pool, while the $113,247 daily supply zone is the higher resistance that would need to be cleared for momentum to shift.

Why It Matters

Bearish voices are now calling for a deeper correction, with some predicting a fall toward $104K, sub-$100K levels, and even a retest of $93K, arguing that the $124K all-time high reached in August may have marked the cycle top.

In their view, the PCE data coming in exactly as expected confirms several encouraging trends for risk assets.

The growing conviction that the Fed will keep easing is a clear sign of support for risk-on assets.

However, the chart shows a continuation purge setup, suggesting that rallies toward $110,700–$111,000 are likely to be sold into.

Details

“We’re seeing spending in almost all of the major categories. It speaks to the overall resilience of the U.S. economy.“

That resilience, according to Bull Theory, strengthens the case for a softer policy stance, as it shows growth can hold up even as inflation cools.

Chart analyst Ali Martinez believes that in the short term, Bitcoin needs to hold above the key $107,200 support level.

Failure to do so would bring $100,000 or even $93,000 into play.

Technical Analysis: Key $107K Support Must Hold to Invalidate Bearish Pattern

On the technical front, the Bitcoin 1-hour chart shows a clear bearish structure following the sharp sell-off that broke down from previous support levels.