Bitcoin trapped below $86K as PCE changes cloud inflation reading — SkimNews
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- Bitcoin held above $83,000 on Thursday after reversing at $85,600 on Wednesday, erasing gains from an initially soft PCE print — the rally followed a 42.7% Q3 gain, Bitcoin's best third quarter since 2017
- August PCE came in at 3.4% year-on-year versus 3.7% expectations, but the Bureau of Economic Analysis incorporated methodology changes affecting portfolio management and investment advice, computer software and accessories, and legal services
- The Kobeissi Letter estimated the methodology changes alone could reduce Core PCE inflation by up to 20 basis points, noting July headline and core PCE had also been revised downward by 30 basis points and forecasting markets would 'heavily discount' the August reading
- CME FedWatch data put the probability of a quarter-point Fed rate hike at the October FOMC meeting at 37%, favoring holding the federal funds target range at 3.75%–4%
- Glassnode flagged that BTC-denominated open interest fell almost 20% while price rose 35% from the August low — putting open interest at its lowest since March and potentially making the rally less vulnerable to leverage flushes
- CoinGlass data showed a new $60 million liquidation cluster near $83,000, with key support at $82,500 and resistance reinforced by sell orders around $85,000 and long-term holder coins clustered in the $84,000–$85,000 range
- Equities sold off alongside the reversal, with the S&P 500 closing Wednesday down 0.25% at 7,651 and the Dow Jones Industrial Average shedding 0.86%
Why it matters: If Kobeissi's 20-basis-point methodology adjustment estimate holds, roughly half of August PCE's apparent downside surprise versus 3.7% expectations is explained by data construction rather than genuine disinflation, weakening the case for the Fed to hold or cut at its October meeting. With open interest at a March low despite a 35% price recovery, the current Bitcoin rally carries less forced-selling risk, but the $60 million liquidation cluster near $83,000 means a break of $82,500 support could cascade quickly.
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