Bitcoin sinks towards $65,000 as inflation douses risk appetite

Bitcoin has swung widely this week. On Wednesday, the token climbed toward $70,000 for the first time since Feb. 16, buoyed by a broad rebound in risk assets

• Bitcoin fell over 3.5% after strong US inflation data
• Investors cut risk as Fed rate cut hopes fade
• Bitcoin trades between $62,000 and $70,000 amid volatility

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Bitcoin tumbled back toward $65,000 Friday after investors reduced risk following the release of stronger-than-expected inflation data that damped expectations for near-term Federal Reserve rate cuts.

The largest cryptocurrency fell more than 3.5% to $65,674 in early morning New York trading, before reversing some of the decline. Bitcoin has swung widely this week. On Wednesday, the token climbed toward $70,000 for the first time since Feb. 16, buoyed by a broad rebound in risk assets. It has since erased most of those gains.

“We’re still in the same range we’ve been in for weeks. Until we see consistent new demand, these moves are going to keep happening,” said Daniel Reis-Faria, chief executive officer of ZeroStack. “Volatility is elevated because liquidity is tight across the board.”

Stocks fell Friday after a report showed US producer prices rose more than forecast, suggesting that inflationary pressures remain persistent. The final stretch of a turbulent month for stocks is ending with losses as the data reinforced bets the Federal Reserve will remain on hold for the timebeing.

“Bitcoin is trading within the $62,000 to $70,000 range and is now on its way to the lower boundary of the channel,” said Alex Kuptsikevich, chief market analyst at FxPro, adding that the token’s “relatively rapid recovery from Tuesday’s lows was met with fairly persistent selling by the end of Wednesday.”

Bitcoin surged to a record high of more than $126,000 in October on expectations of a crypto-friendly second Trump administration. A sharp selloff followed, leaving digital assets under pressure and investors increasingly cautious. Any sustained rebound would offer relief after cryptocurrencies were pummeled late last year.

Fresh momentum could emerge in the second half of this year if US lawmakers approve sweeping market-structure legislation by midyear, according to a research note from JPMorgan Chase & Co.

The Clarity Act, which has passed the House of Representatives, is part of a broader push in Congress to create a comprehensive regulatory framework for digital assets. The bill has moved more slowly in the Senate amid disagreements.

“If passed it will reshape market structure by providing regulatory clarity, ending ‘regulation by enforcement,’ promoting tokenization, and facilitating greater institutional participation,” the bank said.