Bitcoin, XRP, 'Rollercoaster' Despite PCE Boost... Why Did They Give Up Gains?

▲ Bitcoin (BTC), XRP / AI Generated Image

Bitcoin (BTC) and XRP, which had cheered slower-than-expected US inflation data, encountered unexpected obstacles in the form of surging international oil prices and robust economic indicators, giving back their gains and creating a rollercoaster market.

According to financial media outlet Benzinga on September 30 (local time), the US core Personal Consumption Expenditures (PCE) price index for August rose by only 0.2% month-over-month, falling below the market forecast of 0.3%, and recorded 3.0% year-over-year, lower than the expected 3.3%, hitting a six-month low. Following the news of price stability, $75 million worth of short positions were liquidated within an hour, causing Bitcoin to momentarily surpass $85,000 and Ethereum to reclaim the $2,700 level. XRP also showed a strong rebound, touching $1.54 during the trading session.

However, the market's initial cheer quickly cooled as conflicting macroeconomic signals clashed. The final US Q2 Gross Domestic Product (GDP) grew at an annualized rate of 2.2%, exceeding the market forecast of 1.5%, and consumer spending in August also increased by 0.6%, marking the largest increase since March 2025. Although inflation showed signs of slowing, the real economy continued to perform unexpectedly well, and international oil prices soared, causing uncertainty surrounding the Federal Reserve's (Fed) monetary policy path to resurface.

Criticisms regarding the reliability of the inflation data itself also held back buying momentum. Market analyst Bull Theory pointed out that the US Bureau of Labor Statistics (BLS) changed the measurement methods for consulting fees, software, and legal service costs, potentially artificially lowering the core PCE figures by up to 20 basis points (bp). This increased vigilance against technical illusionary effects is believed to have spurred profit-taking across the virtual asset market.

Experts predict that Bitcoin and XRP will continue to seek direction amidst concerns about a resurgence of inflation due to rising oil prices and robust economic indicators. In the case of XRP, as it has not fully broken through the downward trendline resistance near its August high of $1.70, whether it can overcome macroeconomic shocks and break above additional resistance lines will be a key turning point for a rally in early Q4.

[Article Key Summary]

-Core PCE in August slowed to 3.0%, leading Bitcoin to touch $85,000 and $75 million in short positions to be liquidated.

-Q2 GDP growth of 2.2% coupled with soaring oil prices dampened expectations for a Fed rate cut, leading to a surrender of gains.

-Criticisms of distortion due to changes in statistical calculation methods and XRP's $1.70 trendline resistance limited the short-term rebound.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*