Bitcoin (BTC) is steadily reversing the more than 3.8% gains of the last seven days as the effect of U.S. inflation hit the flagship cryptocurrency. As highlighted by Ted Pillows, a vocal market analyst, Bitcoin, which previously surged past $114,000 and looked like it was heading for the next level, has lost momentum.
Bitcoin trading weakens after leak
Notably, the pullback is the result of broader economic developments that are weighing in on the financial market.
The U.S. Consumer Price Index (CPI), which measures inflation, has shown upward movement, increasing from 2.7% to 2.9%. This signals that inflation remains high and is affecting investment patterns.
The rising inflation is causing investors concern as it suggests that the Federal Reserve might decide to keep interest rates high. If the Federal Reserve raises interest rates, risk assets like Bitcoin will not be attractive. The price reversal in Bitcoin is a reaction to these concerns on the broader financial market.
Meanwhile, according to Pillows, despite the inflation worries, Nasdaq futures are up 0.35%, while S&P futures are at 0.27%.
This indicates that Wall Street has not hit the panic button yet and remains slightly more positive than crypto assets.
As of press time, Bitcoin is changing hands at $114,439.98, which represents a 0.5% increase in the last 24 hours. The coin had previously hit a peak of $114,686.09 in an upward rally before being hit by volatility. The trading volume remains low as well and is currently down by 12.35% at $47.94 billion.
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Could U.S. Tariffs fund Bitcoin bull run?
Bitcoin has high chances of a rebound if Fred Krueger’s predictions happen. The former Wall Street quant opines that the U.S. could start buying BTC, using tariff money. The U.S has the potential to generate $50 billion monthly, and investing that in Bitcoin could see the purchase of up to 400,000 BTC.
This could trigger a bullish rally for the flagship coin as the demand will flip the supply, pushing the price upward.
