Bitcoin recovered from weekly lows below $80,000 to stabilise above the $81,000 support level as cooler-than-expected inflation data brought some relief for traders.
The total crypto market cap climbed about 3% to $2.76 trillion at the time of writing, while market sentiment also improved.
The crypto fear and greed index jumped 10 points to 24 to move out of the extreme fear territory.
Altcoins saw a stronger rebound, with over a dozen of the top 99 high-cap coins flashing green on the daily charts.
Why Bitcoin is going up
Bitcoin surged to $84,000, gaining 1% in just 10 minutes after fresh inflation data showed consumer prices rose less than expected in February.
A milder-than-expected CPI report eased concerns about the Federal Reserve keeping interest rates higher for longer, sparking a wave of optimism across risk assets.
Traders are now betting that the Fed might soften its stance, with rate cuts possibly coming sooner than expected.
The central bank has been closely watching inflation trends, and with core inflation cooling to 3.1% from January’s 3.3%, the pressure to maintain restrictive policy may be easing.
For Bitcoin, lower interest rates could mean a stronger push higher.
A dovish Fed stance typically weakens the US dollar, making alternative assets like Bitcoin more attractive.
If inflation continues to trend downward, markets could start pricing in rate cuts for later this year, potentially fueling more upside for BTC in the short term.
Will Bitcoin crash again?
Despite the mild recovery seen during the early Asian trading hours on Wednesday, the momentum was short-lived, as selling pressure returned when Wall Street opened.
Bitcoin dropped to $81,400, erasing most of its earlier gains and hovering near the daily open.
Analysts warn that BTC isn’t out of the woods yet, with some metrics hinting at a deeper correction.
According to CryptoQuant, the Bitcoin bull-bear market cycle indicator has hit its most bearish level of this cycle, sitting at -0.067—the lowest since May 2023.
Historically, similar levels have either led to sharp pullbacks or marked the start of a prolonged downtrend.
Another key metric, the MVRV ratio Z-score, has also crossed below its 365-day moving average, and its recent movement suggests that the rally may be running out of fuel.
According to CryptoQuant analysts, Bitcoin’s key support lies between $75,000 and $78,000.
If this range fails to hold, the price could slide further, potentially reaching $63,000.
One potential catalyst for Bitcoin’s next move is government spending, which Bitget analysts see as a short-term boost.
This ties back to the US debt ceiling—the legal borrowing limit for the government.
When the debt ceiling is suspended or raised, the government can borrow more money, increasing spending and injecting fresh liquidity into the economy.
According to Ryan Lee, chief analyst at Bitget Research, this extra cash could drive up demand for assets like stocks and crypto, helping stabilize the market.
With the debt suspension set to end shortly after the White House Crypto Summit, some of this liquidity might flow into digital assets.
However, this relief may be temporary. Key economic concerns—like inflation, interest rates, and geopolitical uncertainty—are still in play.
Without clear resolutions, any price surge fueled by liquidity alone might not last, according to Lee.
Altcoin market rebounds
The Altcoin Season Index, which measures whether the market is in Altcoin Season based on the performance of the top 100 altcoins against Bitcoin over the past 90 days, dropped 2 points from 16 to 14, with only 11 altcoins in the green.
A sign that Bitcoin’s movements continue to dictate the broader market trend.
Despite this, some short-term traders injected liquidity into the market, pushing the total altcoin market cap up 10% to $1.1 trillion at the last check.
The top gainers for the day posted modest double-digit gains triggered by individual developments:
Pi network
Pi (PI) bounced back from its recent dip, climbing 21% in the last 24 hours to $1.64 as of press time.
Its market cap stood at $11.75 billion, while its daily trading volume jumped 78% to around $772 million.
Source: CoinMarketCap
Pi (PI) recorded strong gains today as investors positioned themselves ahead of Pi Day on March 14, a key milestone for the Pi ecosystem.
Users must transfer their mined Pi to the mainnet ahead of this event to prevent forfeiting a majority of their holdings as the network transitions from testnet to mainnet.
Celestia
Over the past day, Celestia (TIA) rallied 13.35% to $3.32 as its market cap was seated at $1.85 billion at the time of writing.
Its daily trading volume stood at $173.65 million, while its circulating supply was at $1.1 billion TIA tokens.
Source: CoinMarketCap
Recently, Celestia and Citrea have collaborated to enable the deployment of Bitcoin appchains with scalable, low-cost data availability while leveraging Bitcoin’s liquidity and security.
The development, which allows developers to build more efficient and cost-effective applications on the Bitcoin network, has fueled TIA’s gains as investors anticipate increased adoption and utility within the Bitcoin ecosystem.
Story
Story (IP) was up 16.8% over the past 24 hours, trading at nearly $6 when writing.
Over the period, its market cap had increased from $1.27 billion to nearly $1.47 billion, while its daily trading volume stood at $164.7 million.
Source: CoinMarketCap
Most of today’s gains followed Story’s listing on the crypto exchange Kraken on March 10, which sparked renewed investor interest in the altcoin.
The altcoin also gained traction with progress on its roadmap, including the recent launch of the IP Portal for public preview on March 7.
The platform allows users to easily register their IP and browse existing ones across any app on Story.
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