Bitcoin dropped below $78,000 on Wednesday as U.S. inflation data exceeded expectations, pressuring risk assets across markets. The decline followed the release of the July Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge, which rose 3.7% year-on-year, surpassing the 3.6% forecast.
The PCE price index increased 0.2% month-on-month in July, with the core measure excluding food and energy also rising 0.2%, according to the Bureau of Economic Analysis. The data follows June’s unexpected month-on-month decline, the first in six years, and underscores persistent inflationary pressures nearly double the Fed’s 2.0% target.
The report arrives ahead of the Fed’s annual Jackson Hole symposium, where Chair Kevin Warsh is scheduled to deliver the keynote address on Friday. Markets remain sensitive to inflation trends as policymakers weigh the timing and scope of potential rate adjustments.
Bitcoin’s retreat coincided with losses in U.S. equities and gold, which fell below $4,600 per ounce. The digital asset’s one-hour chart showed daily losses approaching 1%, extending declines from Tuesday. Analysts caution that the recent rebound over the past week may represent a bear market relief rally, noting a series of lower highs since October 2023.
Trader Rekt Capital highlighted a downward-sloping resistance trend line and the 50-week exponential moving average at $77,251 as critical levels for Bitcoin to reclaim and sustain. The last monthly close above this moving average occurred in October 2023.
Investors are also focused on Nvidia’s Q2 earnings report, due later on Wednesday, which is expected to influence short-term volatility in risk assets. Analysts project the company to report $92.3 billion in quarterly revenue, with CPU revenue potentially expanding its total market share to between 3% and 5% by 2028, according to Raymond James estimates.
