Bitcoin quickly rebounded from inflation fears, dropping briefly on Tuesday after the April Consumer Price Index (CPI) came in higher than anticipated at 3.8% year-over-year. Gasoline prices, influenced by the ongoing Iran war, largely contributed to this increase. Despite the initial dip to $79,879, the cryptocurrency recovered to $81,208 by Wednesday morning in Asia, ultimately ending the 24-hour session up 0.3% after trading within a $1,400 range. This rapid recovery indicated aggressive buying during the dip.
Among other major cryptocurrencies, BNB led with a 2.5% gain, reaching $677, while dogecoin increased by 1.3% to $0.1114. In contrast, Ether dropped 0.3% to $2,300 over 24 hours and became the cohort’s laggard, down 3.2% over seven days. Solana slipped 0.6% to $95.52, and XRP traded at $1.45, a 0.5% daily decline.
The CPI report rattled traditional financial markets more significantly than crypto. The S&P 500 fell 0.2%, and the Nasdaq 100 dropped 0.9%, with semiconductor stocks bearing the brunt of the selling after weeks of exceptional gains. The rate-sensitive two-year Treasury yield held just under 4%. Globally, elevated energy prices added to inflation pressure, pushing Japan’s 20-year bond yield above its January peak to its highest level since 1997. Asian equities, however, clawed back early losses after the White House confirmed Nvidia CEO Jensen Huang would join President Donald Trump’s trip to China, which boosted chipmaker futures.
Beneath the surface, crypto flows remain positive. CoinShares reported substantial global crypto fund inflows of $858 million last week. Bitcoin products accounted for the largest share with $706 million, followed by Ether with $77 million, Solana with $48 million, and XRP with $40 million. Notably, bitcoin short positions experienced $14 million in outflows, marking the largest weekly short unwind of the year. This suggests investors are exiting bearish bets on bitcoin even as macroeconomic conditions become choppier, a positioning shift that typically precedes upward price movements rather than market capitulation.
Alex Kuptsikevich, FxPro’s chief market analyst, observed that the broader sentiment index settled just below its midpoint, recording readings of 47, 48, and 49 over the past three days, indicating a slight advantage for bears. He noted that Bitcoin “lost its upward momentum as it approached the 200-day moving average,” a crucial long-term trend line. Despite this line trending downwards, the market has not broken through it for six days. Kuptsikevich suggested that the modest decline appears to be more of a breather following a rally.
CoinShares also highlighted that last week’s surge in inflows coincided with a compromise on stablecoin yield treatment under the CLARITY Act, which the Senate Banking Committee is expected to consider next week. This regulatory progress represents one of the few clear positive catalysts the market has seen since the Iran war began, with its impact currently more evident in flow data than in direct price action.
Bitcoin’s ability to maintain the $81,000 level despite a hot CPI print and a tight Treasury yield setup suggests that structural buyers remain active. The market’s resilience will face its next test with next week’s Senate markup and the upcoming round of macroeconomic data.
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