Key Takeaways
- The crypto market has turned green over the last 24 hours, with Bitcoin (BTC) leading the charge.
- This bullishness came from the recent release of positive CPI data, leading investors towards risky assets.
- Another bullish factor is the ceasefire agreement between Russia and Ukraine.
- According to analyst Matthew Hyland, Bitcoin needs to confirm a weekly break above the $89,000 zone for the downtrend to be considered over.
- A failure to close above this price level could lead to a retest of anywhere between $74,000 and $69,000.
Bitcoin has seen an encouraging price increase lately, gaining around 3% over the last 24 hours.
The flagship cryptocurrency has now reclaimed levels above $83,700, and investors are increasingly climbing on board.
Could the local bottom around $76,000 be the final bottom? What factors caused the rebound, and how does this development affect the broader crypto market?
Why Is Bitcoin Rising?
One of the main catalysts behind Bitcoin’s recent rally was the recent release of the latest U.S. Consumer Price Index (CPI) report.
This report shows that inflation cooled more than expected.
Said development alleviated concerns about an aggressive response from the Federal Reserve, which had previously kept investors away from risky assets like BTC.
The easing of inflation concerns pushed investors more towards this asset class, explaining the ongoing price rise.
Geopolitical Tensions Ease Up
Another major factor driving the rise of Bitcoin is the renewed hope for a ceasefire between Russia and Ukraine.
According to reports, the U.S. and Ukraine have proposed a 30-day ceasefire.
This has influenced the global financial markets, coinciding with the 77% chance of a ceasefire before the end of 2025 that investors bet on via PolyMarket.
All of these factors have led to higher inflows into the crypto market, especially with traders seeing more opportunity.
So far, the ceasefire is expected to have major implications for BTC and the rest of the crypto market.
For example, a resolution could stabilize the global energy markets and reduce operational costs for Bitcoin miners.
This would make BTC mining more profitable and drive in more inflows.
In addition, Russian capital flows could regain access to global crypto markets and improve liquidity.
Finally, the reduced geopolitical risk can also lead to better investor confidence and boost Bitcoin’s price over the long term.
Bitcoin Derivatives Data Suggests More Upside
Despite BTC still struggling to break above the psychological $85,000 zone, key derivatives data shows that there might be some strong momentum within the market.
One of the biggest indicators of this trend is the increase in Bitcoin’s open interest to $46.40 billion.
This shows that new positions are being opened on the cryptocurrency, with more investors expecting a price rally.
Interestingly, the last 24 hours have seen liquidations of nearly $200 million in Bitcoin positions.
Around $130.48 million of these were short positions, indicating that short traders are being forced out as Bitcoin increases in strength.
Key Resistance and Support Levels
According to crypto analyst Matthew Hyland in a recent post on Twitter (X), BTC still has a long way to go.
The analyst pointed out that for investors to confirm an end to the recent downtrend, Bitcoin must secure a weekly close above $89,000.
If it fails to break this level, Hyland warns that the downside could continue and target anywhere between the $69,000-$74,000 range.
On the flip side, if BTC does clear this resistance, it could trigger further gains and strengthen the ongoing recovery.
While Bitcoin is the current focus, however, there have been notable price movements on other cryptocurrencies.
For example, Ethereum is lagging BTC slightly and is trading somewhere around $1,866.
However, with the cooling inflation, traders are looking ahead to Ethereum’s upcoming network upgrades.
This could reignite the bullish momentum and lead to more upside for the cryptocurrency.
The Altcoin Market In Perspective
Other altcoins like Solana are showing resilience so far, especially with how most have responded to Bitcoin’s rise.
Cardano has also benefited from this positive momentum. However, it remains range-bound, and investors are expecting new developments in its ecosystem.
Others like XRP and Dogecoin are performing well in similar fashion, with XRP navigating its legal battle with the SEC and Dogecoin exhibiting a healthy correlation with Bitcoin.
Looking ahead, the crypto and stock markets are showing strong correlation to macroeconomic trends, like the US Producer Price Index (PPI) data.
This data release is expected after the Consumer Price Index (CPI) and is due later this week.
The FED meeting and its decision on interest rates will also be crucial for what comes next for Bitcoin.
If the rates remain steady, it could provide more support for Bitcoin’s price.
In Conclusion
Bitcoin’s recent rally has been fueled by the cooling US inflation data and the renewed optimism over the Russia-Ukraine ceasefire.
However, its performance from here on out will depend on whether it can close above the aforementioned $89,000 zone with a daily candlestick.
Other major assets like Ethereum, Solana, Cardano, XRP, and Dogecoin are likely to mimic Bitcoin’s price performance.
Investors must note that while Bitcoin’s current market structure indicates that further upside could be inbound, macroeconomic trends and regulatory updates are still important factors to track.
