Bitcoin's soft-inflation pop to $85,500 fades as bond yields refuse to fall
Bitcoin's recent rally above $85,000 stalled as high bond yields dampened investor appetite for risk assets despite cooling inflation data. While tech stocks saw some gains, the broader market remains sensitive to Federal Reserve interest rate expectations.
Why it matters
The correlation between crypto assets and traditional macroeconomic indicators like bond yields remains a critical factor for market stability and investor strategy.
HYPE led the majors, up 3% to about $89, and DOGE gained nearly 2% to just under 10 cents. Ether, BNB, TRX and ZEC each added less than 1%, and XRP was flat at $1.50. SOL was the laggard, slipping nearly 1% to just under $119, according to CoinDesk data.
"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," Dan Khus, chief analyst at LVRG Research, said in an email to CoinDesk.
"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," he added.
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