Bitcoin hovers above $78k as rebound rally loses some steam after U.S. PCE data

Major cryptocurrencies fluctuated on Wednesday after a higher-than-expected inflation report. Bitcoin ranged between $77,600 and $79,200, while Ethereum briefly reached $2,500. XRP and Dogecoin declined. Crypto-related stocks MSTR and BMNR fell 2.87%. Bitcoin's open interest dropped 1.95%, indicating long-position exits. Analysts noted potential support levels for Bitcoin at $76,400-$77,100.

Bitcoin ETFs attracted $2.56 billion in new investment last week, with $652 million this week alone, according to Farside Investors. Bitcoin's price rose nearly 25% to $78,302. The surge follows Treasury liquidity-support buyback operations and positive regulatory news from the White House.

The UK will implement significant crypto regulations by October 25, 2027, affecting exchanges, custody services, stablecoins, and staking protocols. The rules aim to provide comprehensive oversight, potentially reshaping institutional engagement with Bitcoin. The FCA will require authorization for crypto businesses, with new standards for governance, resilience, and market conduct. Stablecoins are a key focus, and the UK seeks to compete with the US and EU in the crypto space.

Six dormant Bitcoin wallets, inactive for 10-15 years, moved 553.59 BTC ($40.15M). Most transfers went to unknown addresses; one sent 40 BTC to Boerse Stuttgart Digital. Two wallets are linked to a New York lawsuit over dormant Bitcoin addresses. Galaxy Research tracked the movements, noting significant unrealized gains. Security concerns and legal cases may have triggered the activity.

Bitcoin rose above $80,000, a three-month high, driven by U.S. spot Bitcoin ETF demand and short covering. The cryptocurrency gained 16% since the prior week. The U.S. Treasury's bond buyback program, though not directly expanding the money supply, may ease long-term yields, supporting Bitcoin's appeal as a hedge against dollar weakness. The ICE U.S. Dollar Index fell 0.8% during the week.

Bernstein predicts Bitcoin could reach $300,000 by 2029, citing the debasement trade and U.S. dollar concerns. The firm also notes that Strategy Inc., the largest corporate holder of Bitcoin, could benefit from this rally. Strategy's high-yield perpetual preferred stock is mentioned as a potential beneficiary. Bernstein maintains an outperform rating on Strategy, with a lowered price target of $350, implying 176% upside.