Bitcoin Slumps to $39K Ahead of US Inflation Reports

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After a surprising bullish outburst on Wednesday, Bitcoin (BTC) has recorded a sharp 7% slump to the $39K area on Thursday, as traders fled to the sidelines ahead of the US inflation reports. Economists expect US inflation to show a massive spike in consumer prices in February, which could boost investors’ near-term appeal for BTC and other cryptos.

According to business data provider Reuters, US consumer prices are believed to have jumped by almost 8% in February, a record spike in about four decades. That said, the recent trend of rising inflation has surprisingly been bearish for BTC, likely due to its tendency to act like a risk asset. For instance, the benchmark cryptocurrency slumped by about 5% last month following the release of January’s inflation data, which showed a 7.5% jump in consumer prices.

Also, because BTC acts as a sentiment guide for the cryptocurrency market, most top altcoins replicated a similar price trend, with the broader market losing over 5% this morning as it shed $93 billion in the last 24 hours. Ethereum, Binance Coin, Ripple, Luna, Cardano, and Solana have all suffered notable losses in the past 24 hours.

Although many analysts have argued that Bitcoin has decoupled from the stock market in correlation, today’s price action shows that this decoupling has yet to occur.

Key Bitcoin Levels to Watch — March 10

Following its slump from the mid-$42K area, BTC has lost its bearish momentum at the $39K support as possible buyers prevent a fall below that line. Unfortunately, yesterday’s slump also prevented the benchmark cryptocurrency from forming an hourly golden cross, which should have created a new base above the $40K level and helped BTC on its journey back to $50K.

That said, the market remained in a sideways pattern around $39K ahead of the US inflation data report today, which should inject some momentum into the market. I expect to see a decent bullish rebound to the upper-$40K zone before the end of the week, considering the ongoing geopolitical crisis does not escalate.

Meanwhile, my resistance levels are at $40,000, $41,000, and $42,000, and my key support levels are at $39,000, $38,500, and $38,000.

Total Market Capitalization: $1.74 trillion

Bitcoin Market Capitalization: $742 billion

Bitcoin Dominance: 42.5%

Market Rank: #1

 

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