CPI “shock wave” leads Bitcoin to $73,000

The U.S. core CPI in February exceeded analysts' expectations for the second consecutive month, but did not change investors' expectations that the Federal Reserve will cut interest rates this year. Major stock indexes closed higher, with the Nasdaq Composite Index rising about 1.5% and the S&P 500 Index setting its 17th closing record high this year.

In crypto markets, Bitcoin rose to a record high for the third time in just five days, climbing above $73,000 for the first time earlier today before retracing nearly 6% and then rebounding slightly.

CoinGlass data showed that the volatility triggered more than $360 million worth of leveraged liquidations in the crypto market, most of which were long positions betting on price increases, marking the largest long liquidation since the March 5 adjustment.

At press time, Bitcoin is trading at $71,150, down about 2% over the past 24 hours, Ethereum is down 2%, while Ripple ( XRP ), Dogecoin, and Litecoin (LTC) are down 6%-8%.

Among the top 20 cryptocurrencies, AVAX, TON, and NEAR saw the largest gains, rising by more than 15% on the day. AVAX surpassed Shiba Inu (SHIB) to enter the top ten cryptocurrencies by market capitalization, with a gain of 45.38% in the past 7 days.

Aurélie Barthere, chief research analyst at Nansen.ai , said in a report that the U.S. inflation data is only a short-term phenomenon for cryptocurrencies and is unlikely to affect the bull market in the coming weeks.

Barthere said: “There is too much bullish momentum in the crypto space. In terms of the short-term impact of today’s US CPI release, we do not expect it to end the crypto bull run or have a significant impact on prices in the coming weeks. What may happen is a repricing of expectations for Fed rate cuts: the futures market is pricing in four rate cuts by the end of December 2024, which could be reduced to 2-3.”

Cryptocurrency investment service Matrixport noted in a market update on Tuesday that Bitcoin's rally is showing signs of fading momentum. The report highlighted the discrepancy between Bitcoin's high price and a falling relative strength index (RSI), a momentum indicator based on the speed and scale of an asset's price changes.

Matrixport analysts believe that the $69,000 area is a key price level for Bitcoin, where the price may find short-term support. The analysts said: "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 support, but the difference between the falling RSI and the still high Bitcoin price may indicate that Bitcoin needs to consolidate before rebounding again."

Some analysts point to the possibility of BTC rising further to $80,000. Tony Sycamore, market analyst at IG Australia Pty, wrote in a report, “For those looking to push towards $80,000 in the coming months, Bitcoin is expected to be well supported on the dip.”

Katie Stockton, technical analyst at Fairlead Strategies LLC, also said that $80,000 is achievable in the medium term.