Bitcoin rallies back above US$40,000 to show some recovery signs

[LONDON] Bitcoin recovered above US$40,000 on Tuesday, gaining back some ground after dropping for seven days out of the past eight.

The largest cryptocurrency rose as much as 0.8 per cent to US$40,146, gaining steam around midday in Hong Kong after dropping 1.5 per cent earlier in the session. Ether also rallied around the same time, reaching past US$3,000. Altcoins like Solana and Cardano were still lower over the past 24 hours, according to pricing from CoinGecko.

The top tokens are now sitting just above levels considered key by technical analysts.

"Both Bitcoin and Ethereum failed into resistance at their 200-day moving averages (just like the Nasdaq 100) and now must hold support at US$40,000 and US$2,900," said Rich Ross, a technical strategist at Evercore ISI, in a note on Monday.

Bitcoin and the broader crypto market have struggled in recent weeks as the Federal Reserve began hiking rates amid stubbornly high inflation and continuing geopolitical turmoil. US inflation likely accelerated to 8.4 per cent in March, the fastest pace since early 1982, economists surveyed ahead of data due Tuesday predict.

The Federal Reserve may need to raise interest rates "significantly" higher than it currently expects to cool an overheated U.S. economy, Goldman Sachs Group chief economist Jan Hatzius said Friday.

Bitcoin "is still consolidating in a triangle pattern stretching back to mid-January," said Jeffrey Halley, senior market analyst at Oanda. "The lower and upper boundaries today are US$36,500 and US$47,500," he said, implying that Bitcoin was well within its range. A break above or below those support or resistance levels could lead to an US$18,000 move either way, Halley added.

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