Bitcoin rebounded in early U.S. trading on Wednesday, climbing back toward the $71,000 level after briefly dipping to the $69,000 range earlier in the session. The recovery came as oil prices abruptly reversed part of their earlier surge, improving sentiment across risk assets.
The largest cryptocurrency, Bitcoin, quickly jumped from around $69,000 to approach $71,000 during the U.S. morning hours.
Other major cryptocurrencies followed the move higher. Ethereum, Solana and XRP all posted sharp intraday gains as the broader digital asset market strengthened.
The rally appeared to coincide with a sudden reversal in oil prices. Crude had been rallying earlier in the session before dropping about $3 per barrel within minutes. Even after the pullback, April futures for West Texas Intermediate crude oil were trading near $85, roughly 2% higher on the day at the time of writing.
The drop in oil prices also helped lift equities. The tech-heavy Nasdaq Composite moved from a small decline to a gain of around 0.5% in early U.S. trading.
Crypto-related equities delivered mixed results. Shares of Strategy, Galaxy Digital and Bullish edged higher, while Coinbase and eToro traded slightly lower.
So far this week, movements in oil prices tied to the ongoing conflict involving Iran have played a major role in shaping risk markets. Stocks and cryptocurrencies tumbled late Sunday after crude briefly surged toward $120 per barrel, but later recovered as oil prices pulled back.
Inflation data meets expectations
New U.S. inflation data released Wednesday matched economists’ expectations. The February Consumer Price Index rose 0.3% month over month, putting the annual inflation rate at roughly 2.4%.
However, next month’s figures could present a different picture as geopolitical tensions involving Iran may push energy costs higher, potentially affecting inflation readings.
This raises questions about how the Federal Reserve might respond if inflation begins to rise again. Policymakers will need to decide whether to treat any increase as a temporary energy-driven shock or adopt a more hawkish stance after previously underestimating inflation during the last cycle.
According to Stephen Coltman, the central bank’s next steps will be closely watched. Investors are expected to focus on next week’s Federal Reserve meeting for signals on how officials plan to navigate the evolving inflation outlook.
As for bitcoin, Coltman noted that a potential increase in inflation next month may already be reflected in market pricing.
