Bitcoin rebounds above $70K as oil prices resume their slide

Bitcoin rebounded sharply during early U.S. trading on Wednesday, climbing back toward $71,000 after briefly slipping to the $69,000 range earlier in the session. The move came as oil prices abruptly reversed part of their earlier rally, improving sentiment across risk markets.

The largest cryptocurrency, Bitcoin, quickly surged toward $71,000 after trading near $69,000 earlier in the U.S. morning.

Other major digital assets followed a similar path higher, including Ethereum, Solana and XRP, all of which recorded swift intraday gains alongside bitcoin.

The rally appeared to coincide with a sudden pullback in oil prices. Crude had been posting strong gains during the session before abruptly dropping about $3 per barrel within minutes. At the time of writing, April futures for West Texas Intermediate crude oil were trading near $85, still roughly 2% higher on the day.

The decline in oil prices also supported equity markets. The tech-heavy Nasdaq Composite moved from a small loss to a gain of about 0.5% in early U.S. trading.

Crypto-linked equities delivered mixed performance. Shares of Strategy, Galaxy Digital and Bullish edged higher, while Coinbase and eToro traded slightly lower.

This week, market movements have largely been driven by oil price volatility linked to the ongoing conflict involving Iran. Risk assets tumbled late Sunday after crude briefly surged toward $120 per barrel, but rebounded once prices cooled.

Inflation data meets expectations

Fresh U.S. inflation data released Wednesday largely matched expectations. The February Consumer Price Index rose 0.3% month over month, placing the annual inflation rate at about 2.4%.

However, economists expect next month’s data could tell a different story as the geopolitical conflict involving Iran may push energy prices higher, potentially influencing inflation readings.

The key question now is how the Federal Reserve will respond if inflation rises again. Policymakers must decide whether to look through a temporary energy-driven spike or adopt a more hawkish stance after previously underestimating inflation during the last cycle.

According to Stephen Coltman, the central bank’s response will be crucial for markets. Investors are expected to watch next week’s Fed meeting closely for signals on how officials plan to navigate the evolving inflation outlook.

As for bitcoin, Coltman suggested that any inflation increase expected next month may already be reflected in the market’s pricing.