Crypto markets are heading into a major macro event as the United States prepares to release December Personal Consumption Expenditures (PCE) data, the Federal Reserve’s preferred inflation gauge. Market forecasts point to both headline and core PCE rising 0.37% month over month, equivalent to an annualized pace of roughly 4.5%. If those estimates hold, core PCE would climb to 3.0% year over year, its highest level since February 2025, while headline PCE would reach 2.9%, the highest since March 2024.
The expected increase would mark a clear acceleration from November, when headline PCE rose 0.21% and core PCE increased 0.16% on a monthly basis. For digital assets, the interpretation is straightforward: a hotter-than-expected reading could reinforce the view that interest rates may stay elevated for longer, lifting Treasury yields and the U.S. dollar while weighing on risk assets such as Bitcoin and altcoins. A softer print, by contrast, could bring back rate-cut optimism and support a relief rally across crypto.
Bitcoin technicals remain cautious ahead of the release
Bitcoin is trading at $67,852, up 1.27% on the day, but price action still reflects hesitation. Earlier in February, BTC briefly dropped toward the low $60,000s before recovering. Since then, it has been consolidating just below the psychologically important $70,000 level, suggesting traders are waiting for a macro catalyst before committing to a stronger directional move.
Technical indicators also point to a market that is stabilizing but not yet strong. The daily RSI stands at 36.86, with its moving average at 33.81, indicating that momentum has improved from oversold conditions but remains subdued. Meanwhile, the Balance of Power reading stays negative at -3,298, showing sellers still retain a slight edge. If inflation surprises to the upside, Bitcoin could revisit support in the mid-$60,000 range. If the number comes in cooler, traders may look for another test of resistance near $70,000.
BTC/ETH ratio shows a defensive market stance
Another important signal is the BTC/ETH ratio, which currently sits at 34.5806, up 0.69% on the session. The pair has risen sharply from below 30 in late January to above 34 in early February, highlighting Bitcoin’s strong relative performance against Ethereum during the broader market pullback.
Its recent consolidation around the 34 to 35 range suggests that capital remains defensive, with investors favoring Bitcoin over higher-beta altcoins. If PCE inflation comes in hot and risk aversion deepens, Bitcoin dominance could extend further. A softer inflation print, however, may encourage a rotation back into Ethereum and other altcoins.
Watch Treasury yields and the dollar after the release
Traders are not only focused on the headline inflation figure. The immediate reaction in the U.S. 10-year Treasury yield and the dollar index may be just as important for crypto. In recent months, digital assets have remained highly sensitive to shifts in rate expectations, and this release will test whether the narrative of steadily easing inflation still holds.
With core PCE potentially rising to 3.0%, the report could influence expectations for the Fed’s next move and shape market sentiment into March. For now, Bitcoin remains compressed below resistance, and the PCE release may determine whether it pushes higher or rolls over once again.