Bitcoin & Altcoins Surge as US Inflation Cools: PCE Data Analysis

The recent release of the US PCE inflation data, the Federal Reserve's preferred gauge, showed a positive sign for the crypto market. The headline PCE inflation rate slowed to 2.6% from 2.7%, aligning with market estimates. The annual core PCE inflation also dropped as expected to 2.6% from 2.8%. This cooling inflation has led to increased expectations of rate cuts, as evidenced by the CME FedWatch Tool which now indicates a 25 bps rate cut in September. While Fed official Mary Daly expressed cautious optimism, noting the slowest pace of price increases since March 2021, she also emphasized that the Fed is not done yet. This suggests a hawkish stance from the Fed, though the overall sentiment is leaning towards rate cuts. Major Wall Street giants, including JPMorgan, Goldman Sachs, and Morgan Stanley, anticipate inflation to continue cooling, supporting the potential for rate cuts beginning in September. Traders reacted positively to this news, driving up the S&P 500, Nasdaq 100, and Dow Jones Industrial Average stock market futures. However, the crypto market experienced a selloff following options expiry and the US presidential debate. Bitcoin and altcoins like Ethereum, Solana, XRP, and others faced a downward trend. Despite this, Rekt Capital points out that Bitcoin is only one daily close above the Bull Flag top away from a breakout. Popular analyst Michael van de Poppe expects Bitcoin to consolidate in the coming days, and believes altcoins will see higher returns than Bitcoin. Positive developments in the Bitcoin options market suggest a potential transition toward recovery. The US dollar index (DXY) is dropping from 106.12 to 105.85, and the US 10-year Treasury yield has dropped to 4.263%, indicating a positive market response to the cooling inflation data. BTC price is trading sideways, currently at 61,372, with a 24-hour low of $60,561 and a high of $62,292. The trading volume has increased by 1% in the past 24 hours.