Bitcoin dropped below $78,000 on Wednesday after a hotter-than-expected US PCE inflation report, reversing an earlier push above $80,000. The pullback comes as chart analysis shows momentum fading near the same resistance zone, with a bearish RSI divergence on the 4-hour timeframe.
Bitcoin fell back below $78,000 on Wednesday, just hours after breaching the $80,000 level for the first time since May. The reversal followed the release of the latest US Personal Consumption Expenditures inflation report, which showed price pressures running hotter than economists expected.
Hot PCE Data Triggers the Pullback
Bitcoin briefly recovered to $78,043 after the drop, still down 0.64% over the prior 24 hours. Earlier in the day, it had touched an intraday high of $81,235.03.
The US Bureau of Economic Analysis said the headline PCE price index rose 0.2% in July, against a forecast for a 0.1% increase, pushing the annual rate to 3.7% versus an expected 3.6%. Core PCE, which strips out food and energy, rose 0.2% month-on-month and held its annual reading at 3.3%, both in line with forecasts. The prints keep the Federal Reserve's preferred inflation gauge well above its 2% target, though below the 4.1% annual rate touched in May.
Meanwhile, the stronger headline figure pressured risk assets broadly, and Treasury yields rose as traders weighed the reduced room for looser monetary policy.
Technical Picture Shows Momentum Fading
Chart analysis pointed to exhaustion near $80,000. On the 4-hour chart, Bitcoin's price made a higher high while its RSI formed a lower high, a bearish divergence suggesting short-term momentum was weakening even as the broader breakout structure stayed intact.
The $72,000-$74,000 zone remains the key near-term support; a loss of that area would put the $64,000 region, the origin of the prior consolidation, back in focus. On the on-chain side, adjusted SOPR has stayed above the 1.0 threshold, indicating holders are still realizing profits rather than capitulating.
Sources: CoinGape, CryptoPotato
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