Key Takeaways:
- Crypto analyst Miles Deutscher said BTC had “front run” equities, and its pullback is a market adjustment, not a collapse.
- Equities rallied to fresh all-time highs, with the S&P 500 breaking past 6,500, boosted by Nvidia’s earnings and stronger-than-expected U.S. GDP growth.
- July PCE data strengthened expectations of U.S. rate cuts, pushing BTC lower to around $108K amid volatility.
The broader crypto market traded in the red on Friday. The broader crypto market capitalization (cap) fell from $3.86 trillion to $3.76 trillion in the past 24 hours, decreasing by 2.59% at the time of reporting.
The top three crypto coins by market cap, which include Bitcoin (BTC), Ethereum (ETH) and XRP, declined by 3%, 6% and 5% respectively.
However, equities, on the other hand, have rallied to new all-time highs (ATH). The S&P 500 broke its ATH, breaking past 6,500, followed by Nvidia’s earnings and the U.S. GDP growth rate beating consensus estimates.
Crypto analyst, Miles Deutscher, shared his insights on X (formerly Twitter) regarding the current dip in BTC to his 637K followers. According to Deutscher, BTC “front ran” the broader market. This implies that BTC started moving upwards and more aggressively in comparison to traditional stocks.
The chart displayed by the trader showcases the performance of BTC and the S&P 500. BTC is shown in a blue line, which surges ahead of the S&P 500 in a red line. According to the trader, since BTC surged past the S&P 500 by a huge extent, it is now simply pulling back to more sustainable levels. In short, the market is adjusting to the traditional equity market and not collapsing.
Interest Rate Cut Expectations Increased?
The U.S. PCE Price Index for July 2025 increased 0.2% month on month and 2.6% year-on-year, while core PCE increased 0.3% and 2.9%, the highest level in five months. The numbers in line with estimates put rate cuts on the table ahead of the next FOMC meeting.
According to the CME Fed watch tool, the interest expectations increased from 84.7% last week to 87.2% at the time of reporting.
Following the announcement of PCE data, BTC is showing extreme volatility, declining by 3% and trading near $108K. The interest rate expectations will further be determined by job openings and employment data scheduled to be reported on 3rd September and 5th September, respectively.
