Key Takeaways:
- The U.S. inflation reached 7.9%, the highest rate in 40 years, says the February CPI report.
- Fuel prices were the main contributor to the rising inflation amid the war in Ukraine.
- The crypto market lagged behind, as Bitcoin value remained below the critical $40,000 line.
YEREVAN (CoinChapter.com) – Bitcoin (BTC) dropped towards $38,000 amid a selloff led by an incredibly higher inflation report released Thursday.
Inflation soars to four-decade high
In detail, the latest consumer price index (CPI) report showed that inflation rose to 7.9% in February, the highest rate since January 1982. Energy and food prices were the main contributors to the rising inflation. Meanwhile, fuel oil led with a 43.6% year-over-year value gain, followed by Gasoline’s 38.0% price surge and Energy commodities at 37.9%.
The February inflation in oil and gas prices followed Russia’s invasion of Ukraine on February 24. In addition, the uncertainty around the global oil supply caused the price to spike at nearly $130 for a barrel on March 8.
Moreover, as CoinChapter previously reported, U.S. President Joe Biden banned Russian oil and gas imports, as the White House contemplated the possibility of refusing to engage with any nation that didn’t.
Energy also was at the forefront of ballooning prices, accounting for roughly the third of the headline gain. Nevertheless, with food and energy excluded, the core inflation rose 6.4%, which fell in line with the prior estimates.
Also read: Inflation expectations rise ahead of the CPI report as oil prices spike amid the war in Ukraine.
Bitcoin follows a bearish pattern
The cryptocurrency market remained fragile, as Bitcoin fell back to a critical support level near $38,000.
In detail, BTC traded around $38,600 during the Asia-Pacific session Friday. In doing so, it raised risks of confirming a bearish pattern called the ‘symmetrical triangle.’ The latter features two converging trendlines that enclose the price action, preventing sharp breaks.
Furthermore, the Triangle forecasted an eventual avalanche in Bitcoin’s price once the token exhausts the pattern. As of March 11, BTC retested the support and could eye a 12% jump to the Triangle resistance. The latter was instrumental in capping BTC’s bullish attempts since Dec. 2021.
Also read: U.S. bans Russian oil and gas import as risk assets tumble against the record-high fuel prices.
However, community efforts to increase Bitcoin’s functionality could boost the cryptocurrency against the bearish technicals. In detail, crypto exchange Okcoin launched a $165 million initiative Bitcoin Odyssey. It is a year-long pledge among venture capital firms to deploy the mentioned funds into products that accelerate Bitcoin adoption.
The capital will reach solutions across Web 3, including increasingly popular play-to-earn (P2E) games, the metaverse, DeFi, NFTs, and decentralized autonomous organizations (DAO).
