TLDR
- BTC tumbled beneath $78,000 following July’s PCE inflation report of 3.7%, surpassing the anticipated 3.6%
- Traditional equities and precious metals declined alongside cryptocurrency markets after the inflation release
- According to CryptoQuant, Bitcoin has transitioned into early bull territory but requires a daily close above $83,000 for definitive validation
- Recent holders locked in $1.2 billion in profits during the August 20-22 period
- Crypto analyst Rekt Capital cautions the current 25%+ price surge may represent a bear market dead cat bounce
Bitcoin experienced a decline below the $78,000 threshold on Wednesday after United States inflation metrics exceeded market projections. The downward movement affected both digital assets and conventional financial markets simultaneously.
July’s Personal Consumption Expenditures (PCE) metric, which serves as the Federal Reserve’s primary inflation measurement tool, registered at 3.7% on an annual basis. Market forecasters had projected 3.6%. The monthly figure increased by 0.2%, while the core PCE measurement similarly advanced 0.2%.
Market analysis platform The Kobeissi Letter highlighted on X that “inflation in the United States persists at approximately twice the Federal Reserve’s 2.0% objective.”
BREAKING: US July PCE inflation, the Fed’s preferred inflation metric, hits 3.7%, above expectations of 3.6%.
Core PCE inflation was 3.3%, the second highest reading since October 2024.
US inflation continues to run at nearly double the Fed’s 2.0% target.
Own assets or be leftā¦
ā The Kobeissi Letter (@KobeissiLetter) August 26, 2026
The figures let down investors who had maintained positive sentiment following June’s PCE surprise decline, which marked the first negative month-over-month movement in six years.
American equity markets commenced trading on a downward trajectory, while gold descended below $4,600 per troy ounce after the report’s publication. Bitcoin experienced up to 1% intraday depreciation based on TradingView metrics.
$83,000: The Critical Threshold
Notwithstanding the recent retreat, blockchain analytics platform CryptoQuant indicated Bitcoin has transitioned into the initial stages of a fresh bull cycle after the 25%+ price advancement from the previous week. The company’s Bull Score surged from 30 to 80 within seven days ā reaching its peak level since October 2025, when Bitcoin traded near $124,000.
Currently, eight out of ten blockchain indicators monitored by CryptoQuant are signaling positive momentum.
Julio Moreno, CryptoQuant’s research director, identified $83,000 as the crucial price point to monitor, corresponding with the current position of the 365-day moving average. According to Moreno, a daily close exceeding this threshold would represent “official” validation of a fresh bull cycle.
The analytics firm attributed the recent price surge to two macroeconomic drivers: the US Treasury’s announcement to increase long-term bond repurchases to a minimum of $4 billion per transaction starting September 9, and President Trump’s remarks indicating potential government Bitcoin acquisition considerations.
Physical market demand is accelerating at its strongest monthly rate since late December, with both spot and derivatives demand expanding concurrently for the first time since early October 2025.
Market commentator Ted (@TedPillows) summarized the situation on X: “$83,000 ā should Bitcoin surge past this threshold, the cycle low will be validated, eliminating prospects of a decline to $50,000.”
$BTC move to $50,000 or $100,000 first depends on one level.
$83,000.
If Bitcoin breaks above this, the cycle bottom will be confirmed, and there’ll be no dump to $50,000.
Trade with me: https://t.co/kzZIKQsFwf https://t.co/YCJ8BuaoUN pic.twitter.com/nBFLK8CDcV
ā Ted (@TedPillows) August 26, 2026
Near-Term Overextension
CryptoQuant identified signs of short-term market overheating. The unrealized profit percentage for active traders reached 20.5%, its peak since June 2025, a threshold that traditionally precedes sell-offs.
Recent market entrants realized $1.2 billion in profits during the August 20-22 window, including an unprecedented single-day total of $614 million on August 20.
Cryptocurrency exchange deposits also experienced significant increases. Bitcoin deposits approached 53,000 BTC, the highest volume since June 5. Ethereum deposits reached 1.7 million ETH, matching the June 5 peak. Large XRP transfers climbed to 460 million XRP, their strongest showing since February.
Technical analyst Rekt Capital issued a cautionary note on X regarding Bitcoin’s vulnerability to extending its pattern of descending peaks established since October 2025. The analyst pinpointed the 50-week exponential moving average at $77,251 as a crucial support level Bitcoin must recover and maintain. Bitcoin’s most recent monthly close above this indicator occurred in October 2025.
Bitcoin is rejecting from the Macro Downtrend
A Monthly Close below the blue resistance would not just solidify another Macro Lower High but would also build a confluent resistance in association with the Macro Downtrend$BTC #Bitcoin https://t.co/qBMC4CNknc pic.twitter.com/bws93zlkT9
ā Rekt Capital (@rektcapital) August 26, 2026
The PCE release comes just one day ahead of the Federal Reserve’s yearly Jackson Hole economic symposium, where Fed Chair Kevin Warsh will deliver the primary keynote presentation on Friday.
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