Bitcoin Slips Below $78K as Sticky Inflation Revives Hawkish Fed Fears

Bitcoin's price fell below $78,000 on Wednesday after the release of July's Personal Consumption Expenditures (PCE) report. The report showed that PCE inflation stayed above the Federal Reserve's target.

The PCE price index rose 0.2% in July from the previous month, while headline inflation stood at 3.7% year over year, surpassing market expectations of 3.6%. Core PCE, which excludes volatile food and energy prices, also increased 0.2% month over month.

The latest decline highlights how quickly Bitcoin's macro backdrop can change. The cryptocurrency surged above $81,000 earlier in the week alongside gold as falling yields, a weaker dollar, and Treasury liquidity measures supported scarce assets.