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Bitcoin Plunges Ahead of Critical US Inflation Data Release; What to Expect?

Key Bitcoin Takeaways
Bitcoin staged an incredible bounce in the early morning session on Wednesday, breaching $55,000.
Nonetheless, retreating US bond yields prompted traders to sell the multi-week top.
The underlying bullish sentiment kept Bitcoin above crucial support levels while the market awaited the US Consumer Price Inflation report.
Bitcoin went through an aggressive short-covering move from its week-to-date low and rallied by up to around 13.24 percent, breaking above $55,000 on Wednesday.
The strong move upward marked the cryptocurrency’s second weekly gain in a row, led by a flurry of supportive catalysts ranging from booming institutional adoption to lower US government bond yields and weaker US dollar. But as the Asian session matured, Bitcoin showed an absence of follow-through among buyers, prompting a correction that wiped about $10 billion off its market capitalization.
Bitcoin-Yield Inverse Correlation
So it appears, consolidating US 10-year Treasury note yields prompted Bitcoin bears to move back into the US dollar—to take some profits off the table. The cryptocurrency still kept a lid on its underlying bullish sentiment as it maintained support above crucial price levels between $52,000 and $54,000.
Bitcoin holds short-term bullish bias above $52,000-54,000 support area. Source: BTCUSD on TradingView.com
The cryptocurrency market lately reacted strongly to the spike in longer-dated US Treasury yields. The 10-year note offered interest rate returns below 1 percent at the year’s beginning. Nevertheless, as of Tuesday, it was 1.596 percent, propelled higher by an ongoing selloff in the bond market.
Investors sold Treasurys because of signs of better-than-expected economic growth …
Story continues on Bitcoinist

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