Tuesday saw Bitcoin hit a new intraday high in excess of $80,000 for the first time in over three months of trading. The feat came on the heels of a strong rally over the last week that put BTC back into play before an important report on U.S. PCE inflation is due.
Bitcoin Rallies Beyond $80K Amid Bullish U.S. Treasury News
The BTC price has briefly touched $81,237.94 today, but has since pulled back slightly. Bitcoin was at $80,836 at the time of writing with a gain of more than 3%. Furthermore, BTC has increased over the last week by more than 25%. A short squeeze has been aiding the rally.
Bullish trends in the U.S. bond market have been helping the rally. The Treasury doubled its bond buying of long-dated government bonds. The move helped to lift pressure on longer-term yields and support the dollar. That has only further enhanced the attraction of other assets, like Bitcoin and gold.
The macro backdrop has added in debt worries and geopolitical matters. The 30-year Treasury yield has just surpassed its highest level since 2007. The national debt of the U.S. is also a worry and fresh worries have arisen over Iran, both adding to the pressure on the rally.
Nonetheless, with Treasury Secretary Scott Bessent considering using $950 billion Treasury cash reserve for the bond buybacks boosted the sentiment around Bitcoin and the overall crypto market.
US PCE Inflation, Other Macro Events Drive The Surge
Retail sentiment is now very positive. A Stocktwits trader noted the mid-$80,000 range is the next big area for Bitcoin. “BTC Mid 80s is where the next barrel of rocket fuel is sitting. Break it, and we go for 100k almost 100% sure of it,” the trader wrote.
Now, eyes will be on the Personal Consumption Expenditures (PCE) price index for July. Data will be released on Wednesday, August 26. The Federal Funds’ preferred indicator of inflation is PCE.
Headline PCE inflation is projected to increase 0.1% from May and is expected to keep climbing from June’s 0.1% drop. The estimated annual rate is 3.6% up from 3.7%. The reading of Core PCE is expected to rise 0.2% from the previous month and 3.3% on an annual basis.
The report may have consequences for the Fed’s September policy meeting. If it is a hotter reading, that might give further momentum to the argument for keeping rates up. A less tight figure will raise hopes for an easier monetary policy.
U.S. President Donald Trump’s efforts to regulate cryptocurrencies have also helped to boost market sentiment. He hosted crypto executives at the White House last week, and implored Congress to pass the CLARITY Act.
Trump said, “We need Congress to take the next step by passing the CLARITY Act, a fair version of the CLARITY Act. It’s a very, very powerful structured legislation which will keep us ahead of China, keep us ahead of everyone else.”
Other demand factors are also in play with spot Bitcoin ETFs gaining momentum. Last week, BTC ETFs in the U.S. saw $1.92 billion of net inflows. These funds attracted another $338 million investment on Aug. 24, with BlackRock’s IBIT contributing $209 million.
What’s Next For BTC Price?
After this new rally, BTC is trading above its climbing moving averages as revealed by the chart shared by crypto analyst Michaël van de Poppe. For the Bitcoin bulls, the marked zone around $78,000 is a retest area and is considered a possible range of decline.
However, the analyst hinted at an upcoming drop in Bitcoin price. Poppe wrote, “It would be funny if we get another small sweep on #Bitcoin and then back up again.”
He also highlighted a deeper downside level. Poppe added, “It wouldn’t be funny if that sweep is all the way towards $76.5K.”
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