Bitcoin recently experienced a downturn, slipping under $78,000 as the latest US inflation data exceeded expectations. This decline reverberated through both crypto and traditional markets, casting a shadow over what many analysts had hoped would be a sustained rally.
The July Personal Consumption Expenditures (PCE) index—the Federal Reserve’s preferred inflation metric—registered a year-on-year increase of 3.7%, slightly above the forecasted 3.6%. Month-on-month, the index rose by 0.2%, with core PCE also reflecting a 0.2% increase.
This disappointing inflation report came on the heels of optimism following June’s unexpected drop in PCE, which marked the first month-on-month decrease in six years. Following the release of the data, US stocks opened lower, and gold fell below $4,600 per ounce, while Bitcoin recorded losses of up to 1% on the day, according to TradingView data.
$83,000: The Crucial Threshold
Despite the recent dip, onchain analytics firm CryptoQuant suggests that Bitcoin may have entered the early phases of a bull market following a significant 25% rally in the preceding week. The firm’s Bull Score surged from 30 to 80—a level not seen since October 2025, when Bitcoin was trading around $124,000.
Currently, eight out of ten onchain metrics tracked by CryptoQuant are indicating bullish signals. Julio Moreno, head of research at CryptoQuant, emphasized that the pivotal level to monitor is $83,000, where the 365-day moving average currently resides. A close above this level would serve as an “official” confirmation of a new bull market.
The recent rally has been attributed to two macro catalysts: the US Treasury’s announcement to double long-term bond buybacks to a minimum of $4 billion per operation starting September 9, and comments from President Trump suggesting that the US government might consider purchasing Bitcoin.
Spot demand is reportedly growing at its fastest monthly pace since late December, with spot and futures demand increasing together for the first time since early October 2025. Analyst Ted succinctly stated: “$83,000—if Bitcoin breaks above this, the cycle bottom will be confirmed, and there’ll be no dump to $50,000.”
Short-Term Holders and Profit Taking
CryptoQuant has raised concerns about short-term overheating, as traders’ unrealized profit margin hit 20.5%, the highest level since June 2025—a point historically associated with profit-taking. Between August 20 and 22, short-term holders realized $1.2 billion in profits, with a record $614 million realized in a single day on August 20.
Exchange inflows have also surged, with Bitcoin inflows reaching approximately 53,000 BTC, the highest figure since June 5. Ethereum inflows hit 1.7 million ETH, also a June 5 high, while XRP whale inflows climbed to 460 million XRP, marking their highest since February.
Despite these bullish indicators, analyst Rekt Capital cautioned on X that Bitcoin risks continuing its trend of lower highs established since October 2025. He pointed to the 50-week Exponential Moving Average (EMA) at $77,251 as a critical level for Bitcoin to reclaim and maintain, noting that the last monthly close above this threshold occurred in October 2025.
The PCE data release coincides with the Federal Reserve’s annual Jackson Hole symposium, where Fed Chair Kevin Warsh is slated to deliver the keynote address on Friday, further heightening market anticipation.
