Bitcoin derivatives signal panic. A weak core PCE reading could trigger snapback.

3 min readMake preferred on ShareShare this articleCopy linkX iconX (Twitter)LinkedInFacebookEmailMake preferred on Inflation data could determine bitcoin's direction on Thursday. (Unsplash)SummaryShowThis is an excerpt from CoinDesk newsletter 'Daybook.' Sign up here, if you haven't already. The bitcoin BTC$61,304.16 market appears to be in a panic, with derivatives investors paying an outsized premium for protection against declines. Such conditions often set the stage for a snap bullish readjustment if driven by the right trigger. For crypto, that trigger could be the U.S. core personal consumption expenditure (PCE) data due at 8:30 a.m. ET. Bitcoin's one-week options skew shows a near 25-point premium for puts relative to calls, a sign of the bias for downside bets. Similar peak pricing for put options occurred in early February, when BTC carved out an interim bottom just above $60,000, a level that held for four months. The core PCE, which strips out volatile food and energy costs and is the Federal Reserve's preferred inflation measure, is expected to show a 3.4% year-on-year gain for May, up from 3.3% in April and the highest since late 2023, according to FactSet. If the number falls short of estimates, it signals underlying inflation is cooling. That would undermine the case for more Fed interest-rate increases. For bitcoin, then, a softer-than-expected number could trigger a snap adjustment in sentiment. The cryptocurrency has already rebounded to $61,500 from Wednesday's 20-month low near $59,000. Besides, both core and headline readings may be seen as stale, or backward looking, considering the recent slide in oil prices. WTI crude futures have dropped to $70, significantly below the $100-plus level seen during the Iran war in March and April. Headline inflation is expected to hit 4.1%, the highest since early 2023, driven largely by energy prices. "The main question is less whether both headline and core go up—they are widely expected to—but rather how “stale” these numbers already are," economist Mohamed A. El Erian, the former CEO of Pimco, noted on X. "These numbers come before the recent sharp fall in oil prices, which will result in lower headline inflation and ease some of the pressures on core. The question being debated is by how much, including whether May will prove to be the peak inflation month." Beyond inflation numbers, watch out for volatility in Strategy's common shares, MSTR, and preferred stock, STRC, plus AI names on Wall Street. MSTR is flashing a well-recognized major bearish pattern (Check the Daily Signal). Stay alert! Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead." What’s trendingBitcoin has a new line in the sand. Thursday’s core PCE could stress test it. (CoinDesk): Bitcoin found a new support level at $59,000, and Thursday's U.S. core PCE release may test its mettle.Rebound in tech shares pushes world markets higher, while oil prices fall (AP): World shares were mostly higher, led by tech-driven gains in Japan and South Korea as major computer-chip makers surged. Oil prices dropped closer to before the war with Iran began.MemeCore's M token suddenly crashes 80% with no clear trigger (CoinDesk): The token fell from nearly $3 to about $0.50 in a few hours, wiping out close to $3 billion in market value, with no clear motive. Ripple's RLUSD stablecoin goes live in Japan after regulatory approval (CoinDesk): Japan's financial regulator cleared the U.S. dollar-backed token as a new category of payment instrument, giving it access to Asia’s most strictly regulated crypto markets.Today’s signalMSTR's daily price swings in candlestick format. (TradingView)The chart shows daily swings in the price of bitcoin-holder Strategy's (MSTR) common stock since 2022. The stock has broken down from a classic head-and-shoulders top pattern, a bearish reversal formation that often signals further price declines. This pattern is formed by three peaks: a higher central head flanked by two lower, but roughly equal, shoulders, with a neckline connecting the lows between them. The left shoulder developed in mid-2024, followed by a strong parabolic rally that created the peak in late 2024 to mid-2025. After pulling back, the price rallied once more, but could not set a new high and ended up carving out the lower right shoulder through 2025–early 2026. On Wednesday, the price fell more than 8%, penetrating the yellow trendline support. That confirmed the ominous breakdown, which means more losses may be seen in the days ahead. Related AssetsBitcoin$61,304.162.43%Latest Crypto News 1CoinEx denies claims it served as $3.84 billion gateway to sanctioned Iranian crypto firms46 minutes ago2Crypto relief rally fails to shake persistent bearish derivatives signal49 minutes ago3Bitcoin supply in loss reaches record high 10.83 million BTC1 hour ago4Micron deli

Bitcoin derivatives signal panic. A weak core PCE reading could trigger snapback.

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