U.S. personal consumption expenditure ( PCE ) reports fell short of expectations, driving Bitcoin to briefly break above $85,000 on Wednesday. However, U.S. Treasury yields remained near their highest levels since 2002, causing this upward trend to subside subsequently.

During the early trading session in Asia on Thursday, Bitcoin rose by 0.4% to above $83,700. Previously, driven by U.S. inflation data that fell short of expectations, Bitcoin reached as high as $85,500 on Wednesday, but its gains were later reversed as U.S. Treasury yields continued to hover near their highest levels since 2002.

According to CoinDesk data, HYPE led the rise among major cryptocurrencies, increasing by 3% to around $89; DOGE rose by nearly 2% to just under $0.10. Ether, BNB, TRX, and ZEC each increased by less than 1%, while XRP remained flat at $1.50. SOL performed the worst, falling by nearly 1% to just below $119.

LVRG Research Chief Analyst Dan Khus stated in an email sent to CoinDesk: "The August PCE report shows that the pace of inflation cooling down exceeded expectations, with prices rising by 3.4% year-on-year, and 3.0% after excluding food and energy. This reduces the likelihood of the Federal Reserve raising interest rates again in October and makes December seem more likely to be the next time point for action."

He added, "The crypto market sees this as a sign of relief. As bond yields fall and investors become more willing to buy risk assets again, Bitcoin has once again broken above $85,000."

However, late-day fluctuations on Wall Street erased these gains. The yield on 10-year U.S. Treasury bonds was reported at around 5.28%, close to the high seen on Wednesday. The yield on 30-year U.S. Treasury bonds reached its highest level since 2002 during trading in New York and then stabilized at 5.62%. Falling oil prices helped to temporarily ease the selling of bonds, while the dollar strengthened.

Tech stocks bring risk appetite to the Asian markets. The NASDAQ 100 index futures rose by 0.8%, and the S&P 500 index futures rose by 0.4%. After Micron Technology provided an optimistic outlook, driving chip stocks stronger, Japan's Nikkei index rose by 2.7%, and South Korea's Kospi index rose by 1.2%.

Alphabet rose by 1.5% in after-hours trading, following Google's launch of its new flagship AI model Gemini 4 Argon.

Merely based on mild inflation data, with the yield on 10-year U.S. Treasury bonds approaching 5.3%, it is not sufficient for Bitcoin to stabilize above $85,000. Only if this yield continues to decline will it provide room for a new round of upward momentum.