Bitcoin (BTC) saw increased volatility on March 28, briefly climbing to $85,500 before reversing downward. The flagship cryptocurrency dropped over 3% on the day, touching lows of $84,500 on Bitstamp—its weakest level since March 23. The downturn coincided with the latest release of the US Personal Consumption Expenditures (PCE) Index, which showed inflation rising faster than expected.
https://www.tradingview.com/symbols/BTCUSD/?exchange=BITSTAMP
US Inflation Data Sparks Market Jitters
The February PCE report revealed a month-on-month increase of 0.3% and an annual rise of 2.5%, aligning with market expectations. However, the core PCE index, which excludes volatile food and energy prices, came in 0.1% higher than anticipated—indicating persistent inflationary pressures.
Economic analysts, including The Kobeissi Letter, pointed to signs of stagflation, with January’s inflation data also revised higher. “Core inflation is back on the rise,” Kobeissi noted, warning that March’s inflation figures could further influence macroeconomic trends, especially as geopolitical tensions and trade concerns persist.
BREAKING: February PCE inflation, the Fed's preferred inflation measure, was 2.5%, in-line with expectations of 2.5%.
— The Kobeissi Letter (@KobeissiLetter) March 28, 2025
Core PCE inflation RISES to 2.8%, above expectations of 2.7%.
January Core PCE inflation was also revised up to 2.7%.
Core inflation is back on the rise.
BTC Price Faces Key Support Levels
Despite the inflationary warning, Bitcoin traders remained cautious but prepared for heightened volatility. “PCE data coming up, so it’s going to be a volatile day in the markets I reckon,” trader Daan Crypto Trades commented on X (formerly Twitter).
$ETH That's the ~$1B in Open Interest from earlier this week fully retraced as price made new weekly lows.
— Daan Crypto Trades (@DaanCrypto) March 28, 2025
I really don't care too much about ETH until it either trades back above $2.1K or near its cycle lows at $1750.
Other alts mostly following ETH as well as usual.
PCE data… pic.twitter.com/NGLbJ8VnJy
Market sentiment suggests that Bitcoin is still holding its broader uptrend, but signs of fatigue are emerging. Analyst Michaël van de Poppe cautioned that BTC could face deeper corrections if support at $84,000 fails. “Drop sub $84K, and I think we’ll see a test at $78K–$80K before bouncing back up,” he projected.
Meanwhile, TheKingfisher, another well-known trader, downplayed the likelihood of an imminent bullish breakout. “While the short-term price action may suggest a localized squeeze, the broader outlook doesn’t yet support a sustained bull run,” he stated, citing declining volatility and a potential seasonal correction ahead of the traditional “sell in May and go away” phenomenon.
Also Read: Bitcoin Defies $360M Liquidation: Key Support Levels Signal Next Move
What’s Next for Bitcoin?
Bitcoin’s price remains at a critical juncture as macroeconomic uncertainties persist. With inflation rising and traders eyeing key support zones, BTC’s ability to maintain stability above $80,000 will be crucial in determining its next move.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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