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

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.

Core PCE came in at 2.9% this morning.

The same year-over-year print as the previous month.

This allows the FED to continue focusing on the labor market.

Let the rate-cutting cycle continue. pic.twitter.com/eR7biHNLU5

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.

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.

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.

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.

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

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

The Fed’s favorite inflation indicator just dropped and it’s bullish for the crypto market.

US PCE inflation came in at:
– 2.7% YoY (expected: 2.7%)
– Core PCE: 2.9% (expected: 2.9%)
– MoM: 0.2% (expected: 0.2%)

In line with expectations.

This confirms a few important… pic.twitter.com/D8yr95qOhn

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.

“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.

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

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

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.“

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

$107,200 is the crucial support for Bitcoin $BTC. Lose it, and $100,000 or even $93,000 come into play. pic.twitter.com/dmFILjiXzq

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

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.

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.

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

If this rejection holds, the next downside targets line up with the $108,500 control area and the $107,020 high-timeframe support, which also aligns with September’s low.

Overall, technical analysis shows that the path of least resistance is still lower, with any short-term bounces likely facing supply pressure until a decisive reclaim of $113,000 occurs.

While the PCE data provides some macro relief, Bitcoin’s near-term trajectory remains dependent on whether bulls can defend critical support levels and capitalize on potential Fed dovishness.

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