Bitcoin (BTC) fell below $78,000 on Wednesday as investors reacted to US inflation data exceeding expectations, with the July Personal Consumption Expenditures (PCE) index rising 3.7% year-on-year—above forecasts of 3.6%. The Bureau of Economic Analysis (BEA) confirmed the increase, which has raised concerns about persistent inflationary pressures and their impact on risk assets.
The price of BTC/USD dropped 1% in a single day, with traders citing the PCE data as a key factor. Gold also fell below $4,600 per ounce, reflecting broader market caution. Analysts noted that the PCE price index rose 0.2% month-on-month, excluding food and energy, reinforcing fears of prolonged inflation.
Markets are now focused on Nvidia’s Q2 earnings, with expectations of $92.3 billion in quarterly revenue, and the Federal Reserve’s Jackson Hole symposium, where Fed chair Kevin Warsh will address monetary policy. Rekt Capital warned that Bitcoin’s lower highs trend and failure to reclaim the 50-week exponential moving average (EMA)—currently at $77,251—could signal deeper bear market dynamics.
The recent 25% weekly gain in Bitcoin has been described as a “bear market relief rally” by some analysts, though uncertainty remains about whether the cryptocurrency can break its cycle of declining highs. Observers await further signals from central banks and corporate earnings to gauge the path of risk assets.
Written by Oliver Grant
Markets Desk
