(Bloomberg) —
Bitcoin recovered to above $40,000 on Tuesday, gaining back some ground after dropping for seven days out of the past eight.
The largest cryptocurrency rose 0.8% to $40,160 at 5:30 p.m. in Hong Kong, gaining steam around midday in Hong Kong after dropping earlier in the session. Ether also strengthened at around the same time, rising to just above $3,000. Some smaller coins posted larger gains, with Avalance rising 3.8% and Polkadot advancing 2.3%.
Bitcoin and the broader crypto market have struggled in recent weeks as the Federal Reserve began hiking rates to combat stubbornly high inflation and geopolitical turmoil hurt risk appetite. U.S. inflation likely accelerated to 8.4% in March, the fastest pace since early 1982, data due later Thursday is likely to show, according to a survey of economists.
Crypto’s correlation with U.S. tech stocks has risen sharply in the past few weeks, suggesting investors increasingly view digital assets as vulnerable to tightening monetary conditions. But contrast, the massive stimulus the Fed flooded markets with during the Covid outbreak drove Bitcoin to a record $69,000 in early November.
Bitcoin Bearish Flag Has Analysts Looking For Crash Lows: Chart
The Federal Reserve may need to raise interest rates “significantly” higher than it currently expects to cool an overheated U.S. economy, Goldman Sachs Group Inc. Chief Economist Jan Hatzius said Friday.
Bitcoin “is still consolidating in a triangle pattern stretching back to mid-January,” said Jeffrey Halley, senior market analyst at Oanda. “The lower and upper boundaries today are $36,500 and $47,500,” he said, implying that Bitcoin was well within its range.
A break above or below those support or resistance levels could lead to an $18,000 move either way, Halley added.
(Updates pricing in second paragraph.)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
