Bitcoin fell 0.5% to $78,217.50 by 10:55 a.m. ET on Wednesday, retreating from a three-month high above $80,000 reached earlier in the week. The decline came as the U.S. Department of Commerce reported July personal consumption expenditures data, a key inflation metric tracked by the Federal Reserve.
The headline PCE index rose 0.2% month-over-month after a 0.1% decline in June, while the annual increase held steady at 3.7%, slightly exceeding economists' forecasts of 3.6%. Core PCE, which excludes food and energy, also increased 0.2% from June and 3.3% year-over-year, matching prior readings and expectations.
The inflation data complicated the Fed's policy outlook ahead of its September meeting, as persistent price pressures could limit room for rate cuts. The dollar strengthened on the report, weighing on risk assets including cryptocurrencies. Bitcoin had benefited in recent sessions from a "debasement trade" narrative, where investors rotated into alternative assets amid concerns over U.S. fiscal measures and their impact on Treasury yields.
Other major tokens also declined, with Ether down 0.4% at $2,451.44, XRP falling 4.6% to $1.3915, Cardano dropping 3%, Solana easing 0.7%, and Dogecoin retreating 2.9%. BNB was the exception, rising nearly 1%.
Geopolitical developments provided limited support to risk sentiment, with reports of a potential U.S.-Iran ceasefire agreement and ongoing talks between Iran and Oman over the Strait of Hormuz contributing to softer oil prices. However, these factors did little to offset the impact of the inflation data on crypto markets.
Investors also remained cautious ahead of Nvidia's quarterly earnings release, given the company's role as a bellwether for artificial intelligence-related demand. Bernstein maintained its bullish long-term outlook for Bitcoin, projecting prices of $125,000 by the end of 2026, $150,000 by mid-2027, and approximately $300,000 at the peak of the next cycle in 2029.
