Bitcoin is back above $85,000 after a softer-than-expected US inflation reading eased fears that the Federal Reserve would follow its September rate hike with another move in October. The rebound came just a day after analysts warned that rising credit card delinquencies among US consumers could keep risk assets defensive.
Data from CoinGecko showed BTC up 1.8% to trade above $85,000. Roughly $50 million in Bitcoin positions were liquidated in the past hour, with about $48 million of that from short positions, according to CoinClass. The trigger was the Personal Consumption Expenditures Price Index, which rose 3.4% year over year in August, below the 3.7% consensus estimate. The monthly headline increase was 0.3%.
Earlier in the week, Bitcoin had slipped below $85,000 amid expectations of further monetary tightening. The Federal Reserve announced its first rate hike in years on September 16 and traders had been pricing a 68% to 70% chance of another quarter-point increase at the October 27-28 meeting. New York Fed President John Williams said there was “no need for urgency,” and CME FedWatch probabilities slid from 70% to 51.5%, then below 50% after the PCE report.
Before the PCE release, The Kobeissi Letter highlighted that serious credit card delinquencies among Americans aged 18 to 29 rose 10.1% in the second quarter of 2026, the highest since Q1 2025 and the second straight quarterly increase. The measure has more than doubled since Q2 2021. Delinquency transitions among Americans aged 70 and over rose to 6.3%, the highest since Q3 2011, while the 50-59 group edged up to 6.4%. A Spot On Chain-linked account described the situation as a risk-off signal for Bitcoin, saying direction is bearish as long as financial conditions keep tightening for vulnerable borrowers.
Bitcoin was trading near $84,000 before the inflation data, down almost 3% over seven days but up more than 7% over two weeks. It remained about 34% below its all-time high above $126,000. Market watchers outlined key levels including support near $82,000 and targets at $100,000, $115,000 and $118,000, with potential downside toward $75,000 if Bitcoin loses $81,000. Binance also held about $4.35 billion in long positions clustered near $74,000, a setup compared with the October 10, 2025 deleveraging, when more than $19 billion in leveraged positions were wiped out.
