Bitcoin declined below $78,000 on Wednesday following the release of the latest U.S. Personal Consumption Expenditures (PCE) inflation report, which revealed that price pressures came in hotter than anticipated. The downturn followed an earlier milestone in the day when the cryptocurrency breached the $80,000 mark.
Inflation Data Details
According to the U.S. Bureau of Economic Analysis, the headline price index for PCE rose by 0.2% in July compared to the previous month, surpassing the 0.1% monthly increase economists had expected. On an annual basis, headline PCE inflation reached 3.7%, coming in higher than the 3.6% forecast.
Meanwhile, the Core PCE index—which excludes volatile food and energy items—increased by 0.2% month-on-month, matching expectations. The annual core reading remained unchanged at 3.3%, which was also on par with forecasts. These figures keep the Federal Reserve's preferred inflation gauge above its 2% target, though the annual rate has declined from 4.1% in May.
Market Impact
Prior to the pullback, Bitcoin had climbed to an intraday high of $81,235.03, marking its first time trading above $80,000 since May. Following the drop, BTC briefly recovered to $78,043, though it remained down 0.64% over a 24-hour period.
The stronger-than-expected headline reading prompted fresh pressure across risk assets as traders evaluated the potential path of U.S. monetary policy. Treasury yields also increased following the report amid concerns that persistent price growth could limit the scope for looser monetary policy.
