Following the release of the Consumer Price Index (CPI) data, which indicated a spike in inflation in the US, Bitcoin surged beyond $70,000.
Even with the previous drop to $67,000, many investors had previously partially anticipated the $70,000 price increase. High rates of inflation have been the primary driver of this boom, positioning Bitcoin as a possible hedge against the declining buying power of conventional currencies.
A discernible improvement in the performance of equities and other alternative assets has also occurred, as investors reallocate funds to hedge against inflation. Similar to gold, Bitcoin was formerly thought regarded as a “safe haven” asset because of its limited supply and detachment from monetary policies imposed by different governments. But investors are typically prevented from fully utilising it due to its volatility.
Bitcoin’s price performance
The psychological barrier of $70,000 has been broken, confirming the optimistic prognosis for Bitcoin. The approximate range of support levels is $68,220. If Bitcoin continues to rise, it may reach $72,000, the next resistance level. Breaking beyond this barrier might pave the way for greater peaks and even a retesting of past all-time highs.
Examining Bitcoin’s trajectory, we can see that if it can sustain this pace, the cryptocurrency as an investment class may be entering a new phase of maturity. The way the digital asset performed throughout the economic downturn indicates that investors are becoming more confident in its place in diverse portfolios.
The state of the market right now makes a compelling case for Bitcoin’s increasing reputation as a safe haven investment. Bitcoin’s decentralisation and restricted supply make a compelling argument for its use as a diversification and protection mechanism during periods of high inflation, particularly in light of the current surge in inflation rates.
