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US CPI Fuels BTC Rally

Bitcoin prices surged above $26k yesterday for the first time since June 2022. The move came in response to a confirmed drop in US inflation last month which has bolstered expectations of a smaller Fed rate hike this month. With tech stocks and crypto among the hardest hit by the recent USD upswing over February, these assets have been quick to bounce back given the shifting perspective taking hold on markets this week.
 

Upside Risks for BTC

With concerns over liquidity in the banking sector as well as a fresh drop in inflation, the outlook for March is now split between a smaller .25% hike and no hike at all. Against this backdrop, Bitcoin looks to have room to continue to recover near-term, particularly if the USD continues lower ahead of the FOMC. Today’s US data has the potential to drive the risk recovery further if the expected drop in retail sales is seen. With pricing for an unchanged outcome at the FOMC likely to rise on any incoming data weakness ahead of the FOMC, Bitcoin risks appear skewed to the upside for now, creating similar bullish opportunities across the crypto space.
 

Technical Views

BTC

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The rally in BTC off the 20575 support level has seen the market gaining around 35% at its peak yesterday. We’ve seen some pullback from those highs, however, with price currently stalled around the 24930 level. This resistance level can be viewed as the neckline of the large inverse head and shoulders pattern which has framed price action since July last year. If bulls can make a clean break here 28110 is the next target. 

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