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    PCE Data Sparks Crypto Decline

    kumbhorgBy No Comments4 Mins Read
    PCE Data Sparks Crypto Decline

    Cryptos and the major stock indices all experienced sharp declines following the release, while gold rallied to a new record high near $3,150.

    After trading above support at $87,000 for much of last week, Friday’s PCE announcement helped rally Bitcoin (BTC) bears, who dropped King Crypto to $82,000 before bullish reinforcements arrived.

    BTC/USD 1-day chart. Source: TradingView

    BTC/USD 1-day chart. Source: TradingView

    The start of the new month on Tuesday saw a further recovery, with Bitcoin hitting a daily high of $85,542 and closing the daily candle at $85,161.

    BTC is now down more than 22% from its all-time high, making many question whether the cycle top is in and a crypto winter is approaching.

    According to Fidelity analyst Zack Wainwright, while the pullback has concerned some, its post-acceleration phase performance aligns with BTC’s average drawdowns compared with previous market cycles.

    “As of March 3, 2025, Bitcoin reached day 232 of its latest Acceleration Phase, edging closer to when previous phases have peaked and been followed by an abrupt reversal,” Wainwright noted. “The Acceleration Phases of 2010–11, 2013, and 2017 reached their tops on day 244, 261, and 280, respectively, suggesting a slightly more drawn-out phase each cycle.”

    Based on Bitcoin’s history, Wainwright underscored that the likelihood of a blow-off top is increasing. “[H]istory shows that Bitcoin’s Acceleration Phase can conclude with a sharp, dramatic rally—akin to the grand finale in a fireworks show—before rapidly losing momentum and entering the Reversal Phase,” he said.

    Data Suggests Ethereum is on the Road to Recovery

    The PCE-inspired sell-off took a toll on the altcoin market, with most assets in the top 10 recording double-digit losses.

    Ether (ETH), the second-ranked crypto by market cap, was no exception, retesting support at $1,800, its lowest price point since October.

    ETH/USD 1-day chart. Source: TradingView

    ETH/USD 1-day chart. Source: TradingView

    Amid the crypto market recovery on Tuesday, Ether’s price spiked by 7.5%, hitting a daily high of $1,930.

    Along with the support provided by dip-buyers looking to price in the low, Ether also got a boost from the launch of Privacy Pools, a new semi-permissionless privacy tool on the Ethereum mainnet – a development that received praise and a demo from Ethereum co-creator Vitalik Buterin.

    Privacy Pools was launched by Ethereum builder 0xbow.io on March 31, and allows users to transact privately while proving their funds aren’t linked to illicit activities, appealing to crypto holders looking to get a little more privacy on the public blockchain.

    According to 0xbow.io, the system implements “Association Sets” to batch transactions into the anonymous Privacy Pools, and a screening test is conducted to ensure that those transactions aren’t linked to illicit actors, such as hackers, phishers, and scammers.

    To ensure regulatory compliance, the Association Sets have dynamic properties, which means that if an admitted transaction is later found to be illicit, it can be removed from the set without disrupting any other deposits, 0xbow.io said. The system includes a “ragequit” function that enables disqualified deposits to be returned to their original deposit address if the user requests it.

    Another factor supporting Ether’s price is the available supply on exchanges, which is at an all-time low.

    In response to the above post, X user Albatroz Society asked Grok if this is true, to which the AI responded, “Yes, evidence suggests an Ethereum supply shock is occurring, with exchange reserves at a historic low of 18.3M ETH, indicating reduced liquid supply. At ~$1,900, ETH appears undervalued compared to past highs, despite this scarcity.”

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