How will PCE data reshape Bitcoin's market narrative? Opportunities amid large investors' selling pressure

According to CryptoQuant’s in-depth analysis, Bitcoin is currently under pressure from large holders continuously reducing their holdings. This is a primary reason for its underperformance compared to traditional safe-haven assets like gold and silver. The market is experiencing a shift in capital allocation, and the upcoming PCE data release will be a key moment that could change this pattern.

Large Holders’ Sell-Off Causes Bitcoin to Lag

Bitcoin’s performance over the past few months has been disappointing. According to the latest data, Bitcoin is still about 30% below its all-time high, while Bitcoin ETFs have pulled back $5.1 billion from their peak. More notably, since October, the selling pressure from large holders (whales) has not eased, and this passive selling has clearly exerted downward pressure on the price.

In contrast, other risk assets are performing relatively strongly. The S&P 500 is only 1% below its all-time high, and the Nasdaq is just 3% below its peak, both driven by AI-powered tech stocks.

Capital Flows to Safe-Haven Assets, Gold and Silver Shine

An interesting phenomenon is that capital is not flowing into Bitcoin but into traditional safe-haven assets. Gold prices are about 25% above their 200-day moving average, and silver has surged 45%, approaching the all-time highs set during the COVID-19 pandemic in 2020. This indicates that investors, amid economic uncertainty, still prefer historically proven safe havens.

Notably, the correlation between Bitcoin and the Nasdaq has gradually weakened since August, while its correlation with gold has turned negative since July. This suggests Bitcoin is no longer viewed as a risk asset, nor as an inflation hedge.

PCE Data as a Critical Turning Point

In this context, the release of PCE data is particularly significant. If the upcoming data shows a moderate reading, it could boost market expectations of the Fed adopting a more dovish stance, potentially providing new upward momentum for Bitcoin. Conversely, if the data exceeds expectations, it may prolong the current risk-averse capital flow pattern.

CryptoQuant’s analysis indicates that the current market divergence reflects investors’ cautious outlook on the economic outlook. The PCE data will directly influence the market’s re-pricing of liquidity expectations, thereby determining whether capital is willing to reconsider Bitcoin’s value. For Bitcoin investors, this data release could mark an important turning point.