Inflation-driven Bitcoin rally failed to stick

Bitcoin rose 0.4% to just above $83,700 in early Asian trading on Thursday. The price had climbed as high as $85,500 on Wednesday after U.S. inflation data came in softer than expected, but it gave back part of those gains as U.S. Treasury yields did not retreat.

The market’s first positive reaction was driven by August U.S. PCE inflation data. The report showed prices rising 3.4% year on year, while the core measure excluding food and energy came in at 3.0%. That reading weakened the odds of another Fed rate hike in October and pushed expectations further out.

HYPE and DOGE stood out among altcoins

Daily snapshot across major cryptocurrencies

Alongside Bitcoin’s move, other major crypto assets also posted modest gains. HYPE delivered the strongest performance of the day, while DOGE also stayed in positive territory; gains were more muted in several large-cap coins.

  • HYPE rose about 3% to around $89.
  • DOGE gained about 2% as it moved close to $0.10.
  • Ether, BNB, TRX and ZEC each rose less than 1%.
  • XRP traded flat at $1.50, while SOL fell about 1% to just below $119.

The move showed that the relief sparked by the inflation data spread across markets, but the rebound in risk appetite was not equally strong across all assets. For the broader market, the main driver remained macroeconomic sentiment.

High Treasury yields capped crypto appetite

Why did the market stay cautious?

Analysts said the softer inflation reading briefly prompted buying in risk assets. However, U.S. bond yields staying near their highest levels since 2002 prevented a stronger, more durable rally in the cryptocurrency market.

According to Dan Khus, chief analyst at LVRG Research, the cooling in inflation was viewed as a sign of relief in markets and helped investors move back into riskier assets. Still, the lack of a meaningful pullback in the bond market made it difficult for Bitcoin to hold moves above $85,000.