Bitcoin held above $83,000 on Thursday after giving back gains sparked by a softer-than-expected US inflation report, with price still capped below $86,000.
Data from Coinbase showed BTC/USD was flat on the day after a brief burst of volatility heading into the September monthly close and the end of the third quarter. Bitcoin’s latest push higher stalled at $85,600, and the market returned to a rangebound setup.
According to CoinGlass, Bitcoin gained 42.7% in the third quarter, its strongest Q3 performance since 2017. It began the fourth quarter, historically its strongest quarter, at roughly $83,550.
PCE comes in below forecasts, but methodology changes complicate the picture
The move followed the latest US Personal Consumption Expenditures data. The PCE price index, the Federal Reserve’s preferred inflation gauge, rose 3.4% year over year in August, below expectations of 3.7%.
The Bureau of Economic Analysis said in its official release that, excluding food and energy, the core PCE price index increased 3.0% from a year earlier.
That report also included methodology changes affecting portfolio management and investment advice, computer software and accessories, and legal services. The Kobeissi Letter wrote on X: “We estimate the methodology alone could reduce Core PCE inflation by up to 20 basis points,” adding that July headline and core PCE inflation were also revised lower by 30 basis points.
The Kobeissi Letter said markets would “heavily discount” the August reading. In equities, the S&P 500 closed Wednesday down 0.25% at 7,651, while the Dow Jones Industrial Average fell 0.86%.
Data from the CME FedWatch Tool showed markets were pricing the probability of a 25-basis-point rate increase at the Federal Reserve’s October meeting at about 37% on Wednesday, little changed on the day. Unlike last week, markets were favoring no change to the federal funds target range of 3.75% to 4%.
Liquidation clusters build around spot as $82,500 support stays in focus
CoinGlass liquidation heatmap data showed potential liquidation clusters both above and below Bitcoin’s market price. On Thursday, a new $60 million pocket of estimated liquidation exposure appeared near $83,000, close to key support at $82,500. Earlier analysis had identified $82,500 as a critical level for Bitcoin’s broader rebound from its June lows.
Bitcoin’s latest rally reversed at $85,600 on Wednesday. Cointelegraph had previously reported that sell orders around $85,000, along with long-term holder coins clustered in the $84,000 to $85,000 range, could reinforce resistance above the current price.
Open interest drops to the lowest level since March
Onchain analytics platform Glassnode said falling futures open interest may leave Bitcoin’s rally less exposed to forced liquidations.
The firm pointed to a divergence between Bitcoin’s price and BTC-denominated open interest, a measure of outstanding futures positions in Bitcoin terms.
Glassnode wrote on X: “Price is up 35% from the August low, while coin-denominated open interest is down almost 20%.”
It added: “That puts open interest at its lowest since March, potentially making the rally less susceptible to leverage flushes.”