Inflation Data Halts Crypto Rally, Pressures Dollar-Sensitive Assets
Bitcoin fell below $78,000 overnight following July PCE inflation data that came in above expectations, dragging equities and gold lower in tandem. The 24-hour decline of 0.99772% reflects a broader risk-off rotation as markets recalibrate expectations for Federal Reserve rate cuts. Persistent inflation readings reduce the likelihood of near-term policy easing, which typically supports rate-sensitive assets including crypto.
The correlation between macro data surprises and crypto drawdowns remains intact. When inflation signals stay sticky, real yields on dollar-denominated assets become more attractive relative to non-yielding digital assets. This dynamic has constrained Bitcoin's ability to break through recent resistance levels, even as institutional adoption narratives—evidenced by new spot ETFs—continue to broaden the asset class's legitimacy.
