The US Personal Consumption Expenditures (PCE) report for July rose 3.7% year-on-year, coming in hotter than market expectations of 3.6%. As a result, Bitcoin’s price dropped from the $81,000 upper bound to break below $78,000 within hours of the data release. Meanwhile, core PCE held steady at 3.3%.
The price correction aligned with economic growth topping estimates. US second-quarter Gross Domestic Product (GDP) grew at an annualized rate of 1.5%, driven by upwardly revised consumer spending. The flurry of macro data shifted the CME FedWatch odds: the probability of a September rate hike plunged to 38.4% from 82% a month ago, leaving 61.6% expecting rates to remain unchanged.
Why Friday Is a Critical Turning Point
The PCE and GDP data mark only the opening stage of five major catalysts colliding within 48 hours. On Friday, $6.4 billion in Bitcoin options contracts are scheduled to expire on Deribit, with the max pain price pegged at $78,000. An expiry of this scale coincides directly with the keynote address at the Jackson Hole economic symposium.
Fed Chair Kevin Warsh, who took office in May 2026, is set to deliver his first public address. At Jackson Hole, markets will get their first look at his policy communication style just three weeks ahead of the next interest rate decision. Bitcoin’s price has grown increasingly sensitive to macroeconomic conditions and tech equities, tied to Nvidia’s second-quarter earnings report that recently reached $96.2 billion.
Capital Flows Head in the Opposite Direction
While macro data weighed on spot Bitcoin prices, institutional capital entered through another door. Over the past week, spot Bitcoin and Ethereum ETFs absorbed $2.6 billion in fresh inflows. That influx marks the highest weekly tally since October 2025.
The market still has room for further volatility heading into the weekend. Last week’s short squeeze demonstrated how quickly sentiment can pivot, wiping out $3 billion in bearish positions in a single trading day. The convergence of options expiry, heavy ETF inflows, and Friday’s central bank speech sets the stage for Bitcoin’s next decisive move.
Reported by Decrypt.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
