The May 2025 U.S. Personal Consumption Expenditures (PCE) inflation report landed slightly softer than expected, reinforcing bullish sentiment in both traditional markets and cryptocurrencies. This subtle shift in macroeconomic data could be a green light for Bitcoin (BTC), Ethereum (ETH), and broader risk assets amid hopes of a more dovish Federal Reserve stance.
PCE Inflation Highlights: May 2025
| Metric | Reported | Expected |
|---|---|---|
| Headline PCE Y/Y | 2.1% | 2.2% |
| Headline PCE M/M | 0.1% | 0.1% |
| Core PCE Y/Y | 2.5% | 2.5% |
| Core PCE M/M | 0.1% | 0.1% |
Source: Stock Talk (@stocktalkweekly)
Market Reaction: Crypto Leads the Risk-On Rally
Shortly after the 8:30 AM EDT data release on May 30:
- Bitcoin (BTC) surged +1.2%, from $67,500 to $68,310 (Binance)
- Ethereum (ETH) climbed +1.5%, from $3,200 to $3,248 (Coinbase)
- BTC/USD trading volume spiked +18%, with over 12,500 BTC exchanged by 10:30 AM EDT
- ETH/USD trading volume rose +22% on Kraken, hitting 35,000 ETH by 11:30 AM EDT
Meanwhile, U.S. equities also rallied:
- S&P 500: +0.3%
- Nasdaq Composite: +0.4%
- Coinbase (COIN) stock: +2.1%, to $235.50
Technical and On-Chain Indicators: Bullish Momentum Builds
Bitcoin (BTC)
- RSI (4hr): 62 — showing more room to rise before overbought conditions (>70)
- MACD: Bullish crossover at 9:00 AM EDT
- Wallet accumulation: +15% in addresses holding ≥0.1 BTC (Glassnode)
Ethereum (ETH)
- Strong breakout volume on Kraken
- Following BTC’s trajectory amid risk-on sentiment
Macro Correlation
- Bitcoin–S&P 500 correlation coefficient: 0.85 (past week)
- Suggests crypto is tracking equities more closely than ever
Institutional Activity
- $120 million inflow into Bitcoin ETFs post-PCE (CoinShares)
Strategic Implications for Traders
With inflation cooling slightly and rate hike fears easing:
- Breakout watch: BTC above $68,500; ETH eyeing $3,300+
- Risk-on trades in both crypto and related equities (e.g., COIN)
- Hedging and arbitrage opportunities between equities and crypto
- Use RSI, MACD, and volume surges to time entries and exits
Caution Ahead
While sentiment is bullish, traders should:
- Watch for stock market reversals that could trigger crypto profit-taking
- Be mindful of overbought conditions
- Monitor Fed commentary for surprises that could shift the narrative
