(Bloomberg) -- Bitcoin rode out a surprisingly strong US inflation print that roiled global markets by dimming hopes for rapid interest-rate reductions.
The digital asset traded at $49,500 as of 10:21 a.m. Wednesday in Singapore, near the highest level in over two years and little changed since Tuesday's publication of above-forecast figures on US consumer prices in January.
In contrast, the S&P 500 Index slid 1.4% — its worst CPI—day performance since September 2022 — while gold slumped and bond yields soared as traders dialed back expectations for a Federal Reserve rate cut before July.
Read more: Momentum Slams Into a Wall in S&P 500's Worst CPI Day In Years
Bitcoin showed “impressive resilience despite the overnight deterioration in risk sentiment,” Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note. At the same time, separate technical analysis based on chart patterns signals the possibility of a temporary dip to the high $30,000s, he said.
Sector-specific factors have been supporting Bitcoin, including the debut of US exchange-traded funds dedicated to the token. The batch of products from the likes of BlackRock Inc. and Fidelity Investments have attracted a net $3.3 billion since they began trading on Jan. 11.
Meanwhile, the so-called Bitcoin halving due in April will curb supply of the largest digital asset, a development viewed by many as a prop for prices based on historical precedent.
“We expect the market to take a short pause here after a spectacular four-month-long rally, before the upcoming Bitcoin halving takes over the narrative,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets.
Bitcoin has tripled since the start of last year in a comeback from the 2022 digital-asset rout. Wagers in the options market indicate traders are targeting prices beyond the record of almost $69,000 achieved in November 2021.
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