Bitcoin’s price staged a rebound on Tuesday following a notable market decline. However, Presto Research analyst Min Jung tempered expectations, suggesting the uptick was merely a short-term adjustment to recent losses rather than a sign of a broader reversal. “We’re seeing funds gradually return, but this feels more like a natural recovery from yesterday’s market crash, lacking clear driving factors,” Jung noted. “The fact that U.S. stock markets closed with only a slight dip, rather than another sharp sell-off, may have provided some support to the crypto space.”
Attention has now shifted to the U.S. Consumer Price Index (CPI) data set for release on Wednesday, a critical measure of inflation trends. Jung emphasized, “The CPI release will be the week’s pivotal event. Markets are keenly watching inflation signals and how the Federal Reserve might respond.” She suggested that if the CPI exceeds expectations, it could reignite discussions about Fed rate hikes, potentially pressuring risk assets like Bitcoin.
Nick Ruck, head of LVRG Research, offered a sentiment-driven take on the rebound. “Bitcoin’s price recovery reflects a easing of earlier overly pessimistic sentiment, rather than a significant fundamental shift,” he said.
He pointed to the Trump administration’s decision to scrap a planned 50% tariff on Canadian steel and aluminum, originally slated for Wednesday, as a factor that may have softened investor risk aversion. While this policy change didn’t directly propel Bitcoin’s price, it lent a degree of stability to the market. Ruck cautioned, however, that such external positives might prove fleeting, urging investors to remain watchful.
Vincent Liu, Chief Investment Officer at Kronos Research, warned that despite the tariff adjustment’s limited disruption to market momentum, broader economic uncertainties loom large. “Bitcoin’s price uptick doesn’t signal a risk-free environment,” Liu said. “Uneven global economic recovery, geopolitical tensions, and diverging inflation expectations could amplify market volatility in the coming weeks.” He advised investors to exercise caution in short-term trades and keep an eye on wider economic indicators.
Analysts agree that Bitcoin’s near-term performance may be superficial, with its future trajectory tied closely to macroeconomic data outcomes.
Wednesday’s CPI release will not only shed light on the latest inflation trends but could also shape market expectations for Fed policy, determining whether Bitcoin’s rebound gains traction. Experts stress that the current price movements are intertwined with global economic conditions, urging investors to weigh multiple factors beyond isolated events.