Bitcoin rises above $85,000 after PCE inflation misses forecasts

Bitcoin rose above $85,000 after August PCE inflation came in below economists' forecasts. Bitcoin reached $85,598.94 before easing to $84,376.09, up $751.62, or 0.9%, from its daily opening price of $83,624.30. The Federal Reserve's preferred inflation gauge, the PCE index, rose 0.3% in August and 3.4% from a year earlier, below forecasts of 0.4% and 3.7%, respectively. Core PCE, which excludes food and energy prices, rose 0.2% from July and 3.0% from a year earlier, below forecasts of 0.3% and 3.3%. However, core inflation remained above the Federal Reserve's 2% target. CME's FedWatch tool showed a 62% chance that the Federal Reserve would hold rates in October and a 37% chance of a 25-basis-point increase. Bets on a rate increase had already been fading. The 10-year Treasury yield reached around 5.25% on Tuesday, its highest level since 2002. The S&P 500 fell 0.2% to 7,670.84, the Dow Jones fell 0.3%, and the Nasdaq slipped 0.1%. Brent crude briefly exceeded $100 on Monday before easing to $96.16 as the U.S.-Iran conflict continued to disrupt shipments through the Strait of Hormuz. Consumer confidence reached a 12-year low. August job openings totaled 7.08 million, below forecasts. The crypto market's total capitalization rose 0.6% to just under $3 trillion. On Myriad, a prediction market built by Decrypt's parent company Dastan, traders put the odds of Bitcoin exceeding its $126,199.63 record on Binance before 2027 at 7%. Bitcoin would need to rise about 50% in three months to exceed that record. Myriad traders put the near-term odds of Bitcoin staying above $84,000 at 49%. They put the odds of Bitcoin rising above $86,000 by Monday at 21%. Bitcoin fell below $75,000 in mid-September. A large ETF inflow day on September 21, the biggest of 2026, and a wave of short liquidations then helped push Bitcoin to $87,354, its highest price since January. ETF inflows have faded since a week in which they totaled $2.4 billion. Bitcoin has traded between roughly $82,600 and $85,600 over the past week. Bitcoin's Average Directional Index stood at 41.9, indicating a strong trend, though the indicator can remain elevated while prices move sideways. Bitcoin's 50-day exponential moving average stood at $77,809.88, above its 200-day average of $74,423.93. Bitcoin's price was about 8% above its 50-day average, a gap that traders may expect it to revisit. Bitcoin's Relative Strength Index stood at 63.4, indicating buying momentum without reaching the commonly used overbought threshold of 70. The technical picture suggested an upward trend but no breakout above the week's roughly $85,599 ceiling. Traders would look for daily closes above that level, ideally above $87,354, with the Average Directional Index remaining above 25 for confirmation.