Bitcoin dropped 1.8% to $79,093.5 on Wednesday, retreating from recent three-month peaks after blazing past $80,000 earlier in the week, as traders turned cautious ahead of the Federal Reserve's preferred inflation gauge. The broader crypto market followed Bitcoin lower, with Ether, XRP, Solana, and Cardano all posting losses.
Bitcoin fell 1.8% to $79,093.5 by 02:01 ET on Wednesday, pulling back after blazing past $80,000 earlier in the week. Caution ahead of key U.S. inflation data drove the retreat, alongside investor unease before a closely watched Nvidia earnings print expected to set the tone for the AI trade in coming weeks.
Optimism over the U.S.-Iran standoff limited the decline, after a Russian media report said the two sides had reached a ceasefire deal to be announced in the coming days. Oil prices slid on the report, and encouraging comments from Pakistan alongside a resumption of Iran-Oman talks over Hormuz also aided risk appetite.
PCE inflation data awaited for rate cues
Bitcoin's recent rally was fueled largely by the so-called "debasement trade," in which markets bet that U.S. Treasury measures to calm a spike in bond yields would weigh on the dollar. That notion had sparked flows into speculative assets like Bitcoin, crypto broadly, and gold.
PCE price index data due later Wednesday now provides a major test for markets, given the print is the Fed's preferred inflation gauge and is likely to factor into expectations for rate hikes this year. Core PCE inflation is expected to remain above the Fed's 2% annual target. Signs of overheated inflation could offset the debasement trade, since high inflation would push the Fed toward raising rates, a move that benefits the dollar and lowers the appeal of alternative investments.
Altcoin rally stalls
Broader crypto prices tracked Bitcoin's losses after also logging steep gains in recent sessions. Ether fell 1.4% to $2,464.44, while XRP fell 3.8% to $1.4451.
Solana fell 3.6%, Cardano fell 5.4%, and BNB shed 2.3%. Dogecoin fell 2.3%.
Source: Cryptocurrency News
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