Inflation Fears Send Bitcoin Price Crashing to New Lows

Bitcoin's price plummeted to a new low of $59,500 on Thursday after the Federal Reserve's preferred inflation gauge rose to its highest level since 2023. The core PCE index climbed 3.4% year-over-year, while the all-items PCE ran at 4.1% annually.

The sharp increase in inflation has kept expectations for interest rate hikes firmly in place, with traders now seeing an 80% chance of a US rate hike by December. Higher rates tend to weigh on assets like Bitcoin that offer no yield.

As a result, the price of BTC dropped 9% over three days, triggering over $1 billion in liquidations across leveraged positions at the $58,000 level. Analyst Daan Crypto Trades warned that bulls 'have a big job to do' and pointed out that Strategy's new lows are adding pressure to Bitcoin's price.

Institutional interest has been shifting towards AI-linked stocks, with Micron Technology jumping 16% after strong quarterly earnings. Meanwhile, spot Bitcoin ETFs recorded $469 million in net outflows on Wednesday, their largest single-day outflow since June 2.