Crypto traders are bracing for fresh volatility as the U.S. prepares to release December Personal Consumption Expenditures (PCE) data, the Federal Reserve’s preferred inflation gauge, later today.
Summary
- Forecasters anticipate both headline and core PCE rising 0.37% in December (4.5% annualized), pushing core to 3.0% year-over-year — the highest since February 2025 — and headline to 2.9%, the highest since March 2024.
- BTC is trading around $67,852, up 1.27% on the day, with RSI at 36.86, recovering from oversold levels but still showing muted momentum as traders await macro direction.
- The BTC/ETH ratio stands at 34.5806, reflecting continued Bitcoin dominance as investors remain defensive ahead of the inflation print.
According to Wall Street Journal chief economics correspondent Nick Timiraos, forecasters expect both headline and core PCE to rise 0.37% month-over-month in December, equivalent to a 4.5% annualized pace. That would lift core PCE to 3.0% year-over-year, the highest since February 2025, while headline PCE is estimated at 2.9%, the highest since March 2024.
The median forecast aligns with those expectations: 0.37% month-over-month for both headline and core readings, compared with November’s softer 0.21% headline and 0.16% core increase.
For crypto markets, the implications are clear: a hotter-than-expected print could reinforce higher-for-longer rate expectations, pushing Treasury yields and the U.S. dollar higher, typically a headwind for risk assets including Bitcoin (BTC) and altcoins.
A cooler print, however, could revive rate-cut bets and trigger a relief rally.
Bitcoin’s technical setup ahead of PCE inflation data
Bitcoin is trading at $67,852, up 1.27% on the day, according to the daily BTC/USDT chart on Binance. Price action shows consolidation following a sharp early-February drop that briefly pushed BTC toward the low-$60,000s before rebounding.
Since that recovery, Bitcoin has been ranging just below the $70,000 psychological level.
The daily RSI stands at 36.86, with its moving average at 33.81, suggesting momentum remains weak but no longer deeply oversold. The indicator has been gradually recovering from sub-30 levels earlier this month.
The balance of power indicator remains negative at -3,298, highlighting that sellers still hold a slight edge despite the recent stabilization.
For traders, a hot inflation surprise could send BTC back toward the mid-$60,000 support zone, while a softer reading may open the door for a renewed test of $70,000 resistance.
Watch the Bitcoin–Ethereum ratio
Another key signal is relative strength within crypto. The BTC/ETH daily chart shows Bitcoin trading at 34.5806 ETH, up 0.69% on the session.
The pair recently surged from below 30 in late January to above 34 in early February, indicating strong Bitcoin outperformance versus Ethereum (ETH) during the broader market pullback. The recent consolidation around the 34–35 region suggests capital remains defensive, favoring BTC over higher-beta altcoins.
If inflation comes in hot and macro risk aversion rises, Bitcoin dominance could extend further. A cooler print, however, may encourage rotation back into Ethereum and altcoins.
Macro reaction is key
Beyond the headline number, traders should watch the immediate reaction in the U.S. 10-year Treasury yield and the dollar index. Crypto has remained highly sensitive to shifts in rate expectations, particularly as inflation data tests the narrative that price pressures are easing sustainably.
With core PCE potentially rising to 3.0% year-over-year, its highest level in nearly a year, today’s print could shape expectations for the Fed’s next move and set the tone for digital assets into March.
For now, Bitcoin is coiling below resistance. The PCE release may decide whether it breaks higher or rolls.