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The Federal Reserve’s key inflation measure came in hotter than expected in February, according to data released on Friday.
The core personal consumption expenditures (PCE) price index — a key inflation measure closely watched by the Federal Reserve — rose 0.4% in February, the biggest monthly gain since January 2024, putting the 12-month inflation rate at 2.8%. Both came in higher than anticipated, as the Dow Jones surveyed economists, who expected numbers of 0.3% and 2.7%, respectively.
The PCE index measures inflation (or deflation) across a broad range of consumer expenditures and reflects changes in consumer behavior.
The PCE, which is released monthly, is considered to impact Federal Reserve interest rate decisions. High PCE numbers indicate rising inflation, which may drive rate hikes to chill the economy, reducing risk appetite and pushing Bitcoin prices lower as investors flee risk-on assets.
Bitcoin (BTC), alongside major cryptocurrencies XRP and Dogecoin (DOGE), were trading in losses at press time.
Arman ShirinyanThe crypto market's downturn coincides with larger financial market concerns that higher-than-expected inflation may result in the Fed maintaining high interest rates for an extended period, potentially lowering liquidity and risk appetite.
After dropping rates by a full percentage point in 2024, the central bank has remained on hold this year, citing concerns about economic uncertainty.
Crypto market faces $423 million bloodbath
Bitcoin is currently down 3.05% in the last 24 hours to $84,357, extending its daily drop. Bitcoin’s reaction is tied to how the data shapes Fed expectations — volatility often follows as traders adjust positions.
Tomiwabold OlajideThe majority of crypto assets suffered larger losses, influenced by profit-taking following a rally earlier in the week. Ethereum suffered higher losses, falling 6.46% in the last 24 hours to $1,892. XRP, Solana and Dogecoin fell roughly 7% in the same period. Chainlink and Avalanche dropped as much as 9%, while Cardano and Stellar were down more than 5%.
In the last 24 hours, cryptocurrency derivatives traders have seen over $423 million in liquidations as digital asset prices fell. The majority of the bets wiped out, valued at over $367 million, were leveraged longs, or traders who wagered that prices would climb, according to CoinGlass data.
Vladislav Sopov
Dan Burgin