U.S. Core PCE Hits 2.9% in August, Matches Expectations – Does This Clear the Path for Bitcoin?

Core PCE Price Index - The U.S. Core PCE Price Index for August 2025 is reported at 2.9% year-over-year, aligning with market forecasts [1] - The broader PCE index, which includes food and energy, increased by 2.7% year-over-year and 0.3% month-over-month, indicating that price pressures are easing but not completely eliminated [1] Bitcoin Market Reaction - Bitcoin has experienced a nearly 4% decline, influenced by stronger U.S. jobs data and robust GDP growth, leading to over $1.5 billion in liquidations [2] - Bearish predictions suggest a potential deeper correction for Bitcoin, with forecasts indicating a drop towards $104K, sub-$100K levels, and possibly retesting $93K, following the $124K all-time high in August [2][3] Economic Outlook and Investor Sentiment - Following a 25-basis-point rate cut by the Fed, there is optimism that Bitcoin could benefit from the historically bullish seasonality in Q4 [3] - The cooling inflation may restore investor confidence and potentially pave the way for new highs, although macro and geopolitical tensions could pose risks [3] Market Impact of PCE Data - Bull Theory expresses optimism that Bitcoin and the crypto market may be poised for a rebound, viewing the PCE data as confirmation of positive trends for risk assets [4] - Recent tariff measures have had minimal impact on supply-side inflation, providing relief for markets that anticipated worse outcomes [4] Consumer Spending and Economic Resilience - Senior economist Jennifer Lee notes that consumer spending remains strong across major categories, reflecting the resilience of the U.S. economy [5] - This resilience supports the argument for a softer policy stance, indicating that growth can sustain even as inflation cools [5] Rate Cut Expectations - Market odds for another rate cut in October have increased from 75.5% to nearly 81%, signaling support for risk-on assets [6] - Analysts at London Crypto Club predict that the equities market will rise into late November, while Bitcoin and crypto consolidate, potentially reaching new record highs afterward [6]