Coinspeaker
Bitcoin Price Briefly Exceeded $73,000 on Tuesday before Retracing Following Hotter than Expected US CPI Data
Bitcoin (BTC) price experienced heightened volatility on Tuesday following high-impact news on inflation data from the United States. Briefly, Bitcoin price rallied above $73k for the first time in its history before retracting below $70k, but has since stabilized around $72k during the early Asian session on Wednesday. As a result, heavy crypto liquidations have been recorded, whereby data provided through Coinglass shows that more than $349 million has been rekt in the past 24 hours.
The increased crypto volatility was, however, expected amid heightened speculation and high-impact news from the United States. Moreover, major financial institutions from Wall Street have been accumulating more Bitcoins through spot BTC ETFs.
Bitcoin Fundamentals amid Geopolitical Influence
As a globally traded digital asset, Bitcoin price is largely influenced by the changing geopolitical climate. For instance, the monetary policies from major economies – led by the United States, United Kingdom, European Union, and China – have a profound impact on Bitcoin price action. Furthermore, the Bitcoin correlation with major stock indexes remains high as institutional money proliferates into crypto investment products.
On Tuesday, the United States Bureau of Labor Statistics released the highly anticipated Consumer Price Index (CPI). Evidently, the United States Federal Reserve could end up delaying its bid to cut the interest rate later this year.
Although inflation is down from its peak in 2022, the CPI gained 3.2 percent from a year ago and 0.4 percent from February. The increase in monthly CPI was ostensibly attributed to a notable increase in gasoline and shelter, although food prices remained largely unchanged.
Amid the heightened demand for Bitcoin from institutional investors, five US-based spot BTC ETFs now have more than $2 billion in assets under management (AUM), despite the notable daily outflows from Grayscale Bitcoin Trust (GBTC).
Notably, more investors are opting to adopt Bitcoin to hedge against geopolitical uncertainty including the Middle East crisis and the ongoing Russia vs Ukraine war.
On the Flipside
Bitcoin price faces short-term correction after rallying above 2021’s all-time high five weeks before the halving event. Furthermore, the altcoin market led by Ethereum has shown early signs of rallying further in the coming weeks. Notably, the Ethereum network will be conducting its largest upgrade today dubbed Dencun since the Shanghai upgrade last year.
From a technical standpoint, Bitcoin price will find a solid support range between $45k and $52k in case of a sudden market correction.
“We have been bullish on Bitcoin since the end of January, but the risk-reward analysis favors a period of consolidation. This bull market still has legs, but the divergence between a declining RSI and still high Bitcoin prices could signal that Bitcoin needs to consolidate before rallying again,” Matrixport analysts noted.
