Bitcoin Volatility Surges as Investors Await Key PCE Inflation Data

Due to the Labor Day holiday, Crypto Daybook Americas will not be available on Monday but will resume on Tuesday. By Omkar Godbole (all times ET unless specified otherwise), Bitcoin has seen a nearly 3% drop to $109,800 over the past 24 hours, affecting the broader market including ether, which is currently at $2,828.76. However, these losses are within normal ranges, with major tokens trading near recent valuations. The notable development today is the increase in Bitcoin's volatility from recent multi-year lows. The 30-day implied volatility, as measured by Volmex's BVIV and Deribit's DVOL indices, has surpassed the 100-day simple moving average for the first time since mid-June, potentially signaling the price turbulence predicted by some traders for August may occur in September. This volatility surge could be an early indicator for stock traders of a potential uptick in the VIX on Wall Street. According to Michael Kramer, founder of Mott Capital Management, 'Market liquidity pressures are mounting as reserve balances decline and large Treasury settlements approach, leaving equities vulnerable despite lower volatility.' A key piece of data to watch is the upcoming U.S. core PCE release. Analysts from crypto exchange Bitunix note, 'This PCE release will shape the Fed’s future easing path rather than the September decision itself. If data comes in at or below expectations, risk sentiment can hold; but if significantly hotter, the Fed’s forward guidance may shift toward a 'one-and-wait' stance.' Investors should focus on core services, wage trends, U.S. Treasury yields, and the DXY as key drivers of risk appetite. In the event of a soft CPI, ether may outperform due to increased focus on Ethereum's native token, evident from ETF flows showing over $1 billion in net inflows to U.S.-listed ETH ETFs this week, nearly double the $567 million entering bitcoin ETFs. The spread between the U.S. 10- and two-year Treasury yields has risen to its highest since September 2022, supporting a bullish case for gold and bitcoin. Key events to watch include token events, conferences such as The CoinDesk Policy & Regulation conference on September 10, and market movements.