Bitcoin recovers losses, pushes above $70K while oil extends drop

Bitcoin staged a sharp rebound during early U.S. trading on Wednesday, climbing back toward $71,000 after slipping to the $69,000 range earlier in the session. The recovery coincided with a sudden pullback in oil prices, which helped lift sentiment across risk assets.

The leading cryptocurrency, Bitcoin, quickly bounced from around $69,000 to approach the $71,000 level during the U.S. morning.

Other major digital assets followed a similar trajectory higher, including Ethereum, Solana and XRP, which also posted strong intraday gains.

The move appeared to coincide with a rapid reversal in oil prices. Crude had been rallying earlier in the session before abruptly dropping about $3 per barrel within minutes. Despite the pullback, April futures for West Texas Intermediate crude oil were still trading near $85, roughly 2% higher on the day at the time of writing.

The retreat in oil prices also supported equity markets. The tech-focused Nasdaq Composite shifted from a modest decline to a gain of about 0.5% during 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.

Market movements this week have largely been dictated by swings in oil prices amid the ongoing conflict involving Iran. Risk assets tumbled late Sunday after crude briefly surged toward $120 per barrel but later rebounded as oil prices cooled.

Inflation data meets expectations

Fresh U.S. inflation data released Wednesday largely matched economists’ projections. The February Consumer Price Index rose 0.3% month over month, putting the annual inflation rate at roughly 2.4%.

However, next month’s inflation reading could look very different as the geopolitical tensions involving Iran may push energy costs higher, potentially impacting the data.

This development raises questions about how the Federal Reserve will respond if inflation picks up again. Policymakers must decide whether to view any increase as a temporary shock tied to energy prices or adopt a more hawkish stance after previously underestimating inflation during the last cycle.

According to Stephen Coltman, the central bank’s decision will be closely watched by investors, particularly at next week’s Federal Reserve meeting, where officials may provide signals about their policy outlook.

As for bitcoin, Coltman suggested that the market may have already priced in the possibility of stronger inflation data next month.

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