News Bit: Bitcoin Rallies to $26,500 Before Retreating for a Healthy Pullback
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Price data are accurate as of March 15 at 10:00 am (UTC+8).
Here’s what happened:
Bitcoin went above $26,500 on Tuesday, March 14, 2023, following the release of the Consumer Price Index (CPI) data that showed U.S. inflation remained at 6% year-over-year. Bitcoin’s price surged to its highest level since June 13, 2022, breaking a resistance level that had been hard to overcome for months.
The price of Bitcoin increased by 28% between March 12 and 14, 2023.
What caused the Bitcoin price increase?
One of the reasons is the collapse of three major banks in the US, which led to a depeg in major US-based stablecoins and increased demand for Bitcoin as a hedge against inflation and banking risks.
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The other reason is the release of the Consumer Price Index Data in the U.S.
Why did Bitcoin increase because of the Consumer Price Index Data
Bitcoin’s price increased after the CPI data because some investors see it as a hedge against inflation.
- The CPI data showed that inflation in the U.S. was still high at 6% year-over-year, which means that the purchasing power of the dollar was eroding.
- Bitcoin, on the other hand, has a limited supply of 21 million coins and a decreasing inflation rate that will eventually reach zero4. This makes it more attractive as a store of value and a medium of exchange.
Bitcoin Current Price
The price of Bitcoin has dropped significantly since March 14, 2023 to $24,900 to 1 BTC. This is actually the lowest Bitcoin price level in 7 weeks.
Several analysts, including Riyad Carey, Research Analyst at Kaiko, think the price retreat is a healthy pullback for Bitcoin.
Him and other experts argued that this will allow the market to consolidate and correct some of the excesses built up during the recent rally towards $26,500.
“I think it was a healthy pullback after a euphoric crypto-specific rally. I’m still surprised how quickly the market seems to have shrugged off the events of the weekend.“ Carey told Coindesk, referring to the events that unfolded in the three U.S. banks referred earlier in this article.
Bitcoin price level to watch out for
The next price level to watch for Bitcoin is $23,000, which is a key support level that could prevent further downside. If Bitcoin breaks below this level, it could trigger more selling pressure and test the next support at $20,000.
On the other hand, if Bitcoin rebounds from this level, it could face resistance at $26,000 USD and $28,000 USD before attempting to recover its losses.
This article is published on BitPinas: News Bit: Bitcoin Rallies to $26,500 Before Retreating for a Healthy Pullback
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.