Bitcoin retreated modestly in early trading on Friday, after seven consecutive days of gains. The world’s leading cryptocurrency rallied as high as $58,102 on Thursday, tantalizingly close to its all time high of $58,332 from February 21st.
After falling during the pandemic, the US rate of inflation is rising again as the economy recovers. The US Consumer Price Index (CPI) report on Wednesday showed that the prices of consumer goods and services rose at the fastest pace in six months, mostly due to higher gas prices.
Equity markets have been spooked by fears of higher inflation. Rising inflation could lead to a hike in interest rates and spiking consumer prices, which could dampen economic growth. However, Wednesday’s report showed that core CPI rose less than expected, easing concerns of excessive inflation.
On Thursday, the Dow Jones Industrial Average soared by over 400 points to a record high. Investor confidence was boosted by falling bond yields and news that House Democrats passed a $1.9 trillion coronavirus relief bill on Wednesday.
In his first primetime address to the nation on Thursday, President Biden said: “If we all do our part, this country will be vaccinated soon, our economy will be on the mend, our kids will be back in school, and we’ll have proven once again that this country can do anything.”
Earlier this month, Federal Reserve Chairman Jerome Powell maintainted the central bank’s promise to hold interest rates near zero and continue with its monthly bond buying. Investors now look to next Wednesday’s FOMC statement for any adjustment to the Fed’s outlook.
Bitcoin bulls eye the record price levels near at hand. However, market technicians also wonder if a bearish double top pattern may be forming and also note the lackluster volume.