Bitcoin price, the largest cryptocurrency by market value, is holding its own as oil prices jump back above $100 a barrel, rekindling inflationary concerns among traditional investors. At the time of writing, BTC is changing hands at $39,962.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price struggled to hold $40,000 while SHIB rallied by as much as 12%
The U.S. trading action on Tuesday started with the monthly U.S. Consumer Price Index report showing that inflation accelerated to 8.5% in March, a fresh four-decade high. The data point assuaged analysts’ concerns that prices might be spiraling out of control, and stocks rose; some economists said inflation might be nearing a peak. Later in the session, rising oil prices appeared to dent the optimism, and stocks ended the day lower.
“When inflation and CPI data releases are major subjects of interest for the crypto community, price turnarounds generally occur. We’ve seen a decent crypto bounce today, with consumer price data revealing a higher than expected 8.5% rise in March”, Santiment reported.
Source: Santiment
This year, sharp price swings have been the norm as macroeconomic and geopolitical uncertainty kept traders on edge. A combination of war, rising interest rates, inflation, and slower economic growth, have caused investors to reduce their risk exposure, particularly during the first half of the month. For example, over the past two weeks, price action has resembled pullbacks that occurred in the first half of February and March. That could point to a brief recovery phase in cryptos and stocks, barring unforeseen circumstances.
But as of press time, Bitcoin was up slightly, changing hands around $39,600. The strength was surprising because the leading cryptocurrency had been down for two straight days, dipping below $40,000 earlier in the week for the first time since mid-March. Some investors see Bitcoin as a hedge against inflation, but lately, price movements for the 13-year-old cryptocurrency have been increasingly correlated with U.S. stocks.
On Tuesday, Bitcoin returned to above $40,000 as buyers reacted to short-term oversold signals. BTC is down by about 12% over the past week, although technical indicators suggest the pullback could stabilize over the next few days. The cryptocurrency could face additional price swings within its two-month-long range of $37,500 support and $47,000 resistance.
The daily chart’s relative strength index (RSI) is near oversold levels, which means buyers could remain active heading into the Asia trading day. Further, positive momentum signals on the weekly chart suggest pullbacks will remain brief this month.
Stronger resistance is seen at $50,966, which could limit an upswing in price.
Most altcoins outperformed Bitcoin on Tuesday, suggesting a greater appetite for risk among traders. Shiba Inu (SHIB) rose by 12% over the past 24 hours, compared with a 2% decline in BTC. NEAR was up by 3%, while Convex Finance (CVX) was down by 6% over the past 24 hours.
The overall cryptocurrency market cap stands at $1.855 trillion, and Bitcoin’s dominance rate is 40.8%.
Read more:
- Anonymous Whales Withdrawn A Close To $280M In Bitcoin From Coinbase As Price Briefly Plunged Under $40,000
- Bitcoin Price Has Been On The Decline Again, But Up To 75% Of BTC Addresses Are In Profit