Bitcoin Retreats Below $84,000 After Brief $85,500 Spike as Bond Yields Rise and Bitget Hack Fallout Continues

Bitcoin surged briefly to $85,500 on Wednesday before giving back all gains, falling to $83,956 on Binance spot trading by 1:38 p.m. ET. The rally was sparked by August core PCE data that came in at a modest 0.2% monthly gain, cooling expectations for an October Federal Reserve rate hike, but rising Treasury bond yields capped the recovery and pushed prices back below $84,000.

The PCE release triggered a sharp move in crypto derivatives markets, generating a 2,633% liquidation imbalance across Bitcoin, Ether, and XRP as shorts were squeezed. Even so, Bitcoin continued to hoard liquidity at the expense of altcoins, which lagged as speculative bets wound down. Core PCE showed that prices for more than half of the components in the basket are still rising faster than the Fed's target rate, keeping the inflation picture complicated.

Separately, the fallout from the Bitget wallet hack continued to develop. The attack, attributed to a third-party security vulnerability, resulted in $387.5 million in losses. Six days later, Bitget reported that withdrawals of Bitcoin, Ether, and USDT had resumed, its Protection Fund was refilled two days ahead of its own deadline and now stands above $300 million, and a proof-of-reserves audit shows 131% coverage. However, investigators still lack a complete account of the attack. Wallets tied to suspected North Korean operators moved approximately $3.9 million of the stolen funds into Zcash's newest privacy pool, Ironwood, on Wednesday, signaling an attempt to push proceeds beyond recovery range.