Bitcoin stabilized above $42,000, although investors continued to monitor tensions on the Ukraine border and inflationary data.
After dropping sharply Friday, bitcoin found firm footing in the $42,000 to $43,000 range during U.S. trading hours as investors continued to hold their breath about a potential Russian invasion of Ukraine, particularly the implications for the global energy supply.
At the time of publication, the largest cryptocurrency by market capitalization was trading just below $42,800, up slightly over the last 24 hours.
Ether, the second-largest crypto by market cap, was trading at above $2,900, up more than 2% over the same time period. Major altcoins were mostly in the red. Trading was light.
Bitcoin has shown strength this month after a slide to yearly lows of $33,000 in January. It broke above the $38,000 and $41,500 resistance level in the first week of February to monthly highs of $46,000, a level previously seen in the final weeks of 2021.
Traders have since taken profits on the move as bitcoin saw weekly lows of $41,600 in early Asian hours on Monday but recovered to nearly $42,000 in afternoon hours.
The Relative Strength Index (RSI) levels showed readings of 39 on Monday, suggesting an end to the weekend slide and a continuation of the uptrend to the $48,000 level.
RSI is a price-chart indicator that calculates the magnitude of price changes. Readings above 70 suggest an asset is “overbought” and could see a correction, while below 30 imply “oversold” wherein assets may recover.
Bitcoin recovered some of its recent price drops, passing through $43,500 after Thursday’s report of higher-than-estimated U.S. inflation sparked declines in bonds, equities, and the crypto market.
Major cryptocurrencies nevertheless remained lower Friday over 24 hours, with bitcoin down 2.8% and ether 4.5% at the time of publication.
U.S. inflation hit 7.5% in January, a 40-year high, with prices for goods and costs for services expected to pick up. Traders from Goldman Sachs forecast up to seven rate hikes this year.
Rate increases are an attempt to rein in inflation, a direct result of the asset-buying program put in place by the U.S. Federal Reserve following the onset of the coronavirus in early 2020.
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