BTC Falls Below $78K as July PCE Inflation Stays Above Fed Target

Bitcoin fell below $78,000 on Wednesday after hotter-than-expected U.S. inflation data revived concerns that the Federal Reserve may have limited room to ease monetary policy.

BTC had traded as high as roughly $81,235 earlier in the session, extending a strong August rally, before reversing after the release of July's Personal Consumption Expenditures report. The pullback briefly took Bitcoin toward $78,000, erasing much of the day's advance.

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The move comes only days after Bitcoin approached $80,000 on stronger ETF demand and improving Treasury-market liquidity, factors that had helped drive its recent rally.

PCE inflation stays well above Fed target

Official BEA data showed that the PCE price index rose 0.2% in July from the previous month after falling 0.1% in June. Headline inflation stood at 3.7% year over year, above expectations cited by market reports for 3.6%.

Core PCE, which excludes volatile food and energy prices, also increased 0.2% month over month. The annual core reading remained at 3.3%.