Bitcoin’s move above $85,000 following a softer U.S. inflation reading quickly lost steam as Treasury yields remained elevated, limiting the cryptocurrency’s upside.
BTC was trading just above $83,700 during Thursday’s Asian morning session, up 0.4%. The cryptocurrency had reached $85,500 on Wednesday after the latest PCE data came in weaker than expected, but much of that advance disappeared as bond yields stayed close to levels last seen around 2002.
HYPE outperformed other major tokens, climbing 3% to roughly $89. DOGE gained nearly 2% to just under $0.10. Ether, BNB, TRX and ZEC each posted gains of less than 1%, while XRP was unchanged near $1.50. SOL declined almost 1% to below $119, according to CoinDesk data.
PCE Data Eases Some Fed Concerns
The August personal consumption expenditures report showed inflation cooling more than economists expected. Prices increased 3.4% from a year earlier, while the measure excluding food and energy rose 3.0%.
Dan Khus, chief analyst at LVRG Research, said the report reduced expectations for another Federal Reserve rate increase in October and shifted attention toward December as the more likely next policy move.
“August’s PCE report showed inflation cooling more than expected, with prices up 3.4% from a year earlier and 3.0% excluding food and energy, which has reduced the odds of another Federal Reserve rate increase in October and made December look like the more likely next move,” Khus said in an email to CoinDesk.
The initial reaction across crypto markets was positive, with bitcoin briefly reclaiming the $85,000 mark.
“Crypto markets took that as a relief signal, and bitcoin jumped back above $85,000 as bond yields slipped and investors became more willing to buy risk assets again,” Khus added.
Treasury Yields Remain a Headwind
The improvement in risk appetite faded during late U.S. trading as Treasury yields remained elevated.
The 10-year Treasury yield hovered around 5.28%, close to Wednesday’s high. The 30-year yield was steady near 5.62% after touching its highest level since 2002 during the New York session.
Falling oil prices helped ease some of the pressure in the bond market, while the dollar strengthened.
Risk sentiment remained firmer in Asian markets. Nasdaq 100 futures rose 0.8%, while S&P 500 futures gained 0.4%. Japan’s Nikkei advanced 2.7% and South Korea’s Kospi added 1.2%, helped by Micron Technology’s stronger-than-expected outlook for chip demand.
Alphabet climbed 1.5% in extended trading after Google started rolling out Gemini 4 Argon, its new flagship AI model.
BTC Rally Faces Yield Test
The latest move suggests that softer inflation alone may not be enough to support a lasting bitcoin breakout.
BTC briefly reached $85,500 after the PCE report, but the rally faded while the 10-year Treasury yield remained close to 5.3%.
A sustained decline in the 10-year yield would remove some of the pressure on risk assets and could give bitcoin more room to maintain a move above $85,000.
