Bitcoin (BTC) experienced a downturn on March 28, reacting to higher-than-expected US inflation data.
Bitcoin Faces Volatility After PCE Release
Data from TradingView showed BTC/USD reaching $85,500 during Wall Street’s opening hours before reversing downward.
The cryptocurrency fell over 3% for the day, dipping below $84,500 on Bitstamp, marking its lowest point since March 23.
The February US Personal Consumption Expenditures (PCE) Index indicated a rise in inflation, contrary to the previous month’s cooling trend.
While the month-over-month and year-over-year PCE figures aligned with forecasts at 0.3% and 2.5%, respectively, their core PCE counterparts exceeded expectations by 0.1%.
“The core inflation rate is climbing again,” noted The Kobeissi Letter on X, emphasizing that January’s figures were also revised upward.
Kobeissi warned that the current macro landscape is shaping up for potential stagflation in 2025, adding:
“March inflation data will provide even more clarity as the ongoing trade war intensifies.”
Analysts Say BTC Still in a “Typical Market Cooldown”
Despite the inflation-driven turbulence, Bitcoin’s price movement left traders anticipating further market swings.
“With the PCE data dropping, it’s bound to be a volatile day across the markets,” remarked Daan Crypto Trades on X.
Meanwhile, some analysts remained skeptical about Bitcoin’s broader strength, despite its sustained position above $80,000 in recent weeks.
“The trend for BTC is still upward, but it’s starting to look less convincing,” said Michaël van de Poppe, trader and market analyst.
“If we see a drop below $84K, we might test $78K–$80K or even lower before bouncing back up.”
Fellow trader TheKingfisher also doubted the possibility of an immediate bullish resurgence.
“While short-term price action might hint at a localized squeeze, the bigger picture doesn’t yet support a strong continuation of the bull run,” he stated.
“With volatility declining, this seems more like a standard market cooldown. We may be heading toward a seasonal reset, potentially aligning with the usual ‘sell in May and go away’ cycle.”
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