Bitcoin Dips Below Key Support After Hot Core PCE Inflation Data

Bitcoin has broken below its 200-day moving average, a key technical support level, following the latest U.S. inflation report. The move comes after the February Personal Consumption Expenditures (PCE) index showed inflation remains stubbornly high, raising concerns among investors.

While the headline PCE came in at 2.5%, in line with expectations, the Core PCE—which excludes food and energy—ticked up to 2.8%, slightly above the forecasted 2.7%. This hotter-than-expected reading has rattled markets already on edge due to uncertain macroeconomic conditions. Bitcoin, known for its sensitivity to liquidity conditions, is now facing additional downside pressure as hopes for early rate cuts by the Federal Reserve fade.

The 200-day moving average is a widely watched trend indicator, and breaking below it often signals bearish momentum. With the Fed prioritizing PCE over CPI as its preferred inflation gauge, this report could delay any dovish pivot, especially with inflation still running above the central bank’s 2% target.

Investor sentiment has shifted dramatically in just a few weeks. Recent optimism that inflation was under control now seems premature, with persistent inflation challenging that narrative. Meanwhile, market watchers were surprised as Tether minted another 1 billion USDT tokens even as Bitcoin plunged below $85,000, raising further questions about liquidity and market direction.

As inflationary pressures linger and the Fed maintains a cautious stance, Bitcoin’s near-term outlook remains uncertain. The next moves will depend on upcoming inflation data and whether macro conditions continue to tighten.