Bitcoin weathers global market slump sparked by inflation jump

Bitcoin showed “impressive resilience despite the overnight deterioration in risk sentiment,” Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note. At the same time, separate technical analysis based on chart patterns signals the possibility of a temporary dip to the high $30,000s, he said.

Sector-specific factors have been supporting Bitcoin, including the debut of US exchange-traded funds dedicated to the token. The batch of products from the likes of BlackRock Inc. and Fidelity Investments have attracted a net $3.3 billion since they began trading on Jan. 11.

Meanwhile, the so-called Bitcoin halving due in April will curb supply of the largest digital asset, a development viewed by many as a prop for prices based on historical precedent.

“We expect the market to take a short pause here after a spectacular four-month-long rally, before the upcoming Bitcoin halving takes over the narrative,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets.

Bitcoin has tripled since the start of last year in a comeback from the 2022 digital-asset rout. Wagers in the options market indicate traders are targeting prices beyond the record of almost $69,000 achieved in November 2021.