Bitcoin slips below $79,000 as hot PCE print pressures crypto

Bitcoin fell below $79,000 on Wednesday after the Federal Reserve's preferred inflation gauge came in hotter than expected, pressuring risk assets across the crypto market.

"PCE is one of three major hurdles for markets this week, alongside Nvidia earnings and Fed Chair Kevin Warsh's Jackson Hole speech," Tom Lee, head of research at Fundstrat, told MarketWatch.

The Bureau of Economic Analysis released the July personal consumption expenditures report at 8:30 a.m. ET. Economists had expected core PCE to rise about 0.2 percent month on month, with annual underlying inflation remaining above 3 percent. The hotter-than-expected reading pushed Bitcoin to around $79,000 after it failed to hold above $81,000, according to CoinGecko data. XRP and Dogecoin also dipped, while Ethereum rose, pointing to rotation within the sector.

A hotter inflation print raises expectations of prolonged higher interest rates from the Federal Reserve, which typically pressures speculative assets. Bitcoin's next key support sits near $79,000, with resistance at $81,000; a continued hot inflation run could push the token toward lower levels if the Fed maintains a hawkish stance.

Despite the pullback, one popular analyst said Bitcoin's market structure remains "intact," framing the move as a correction within a broader uptrend rather than a trend reversal. The comment echoes a view that macro-driven drawdowns have historically been buying opportunities for the token, though the analyst did not specify a target level.

The inflation data also rippled through related markets. Higher Treasury yields and a firmer dollar typically weigh on crypto, and the hotter print reinforced that dynamic. Ethereum's resilience against the broader dip suggests capital rotating out of the largest tokens into alternatives, a pattern that could persist if the Fed signals no near-term easing.

For traders, the immediate focus shifts to whether Bitcoin can defend the $79,000 support zone. A break below that level would open the door to a test of lower ranges, while a reclaim of $81,000 would signal renewed upside momentum. The next major catalyst is the Fed's policy path, with markets watching for any shift in tone from officials.

This article is for informational purposes only and does not constitute investment advice.