Bitcoin is trading near $22,250 as the total crypto market capitalization rises above $1 trillion

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(Kitco News) Prices across the cryptocurrency market climbed higher in trading on Tuesday as the latest Consumer Price Index (CPI) report came in above expectations. The report had little impact on the crypto market, but resulted in battles for the traditional markets.

After the CPI reveal – which came in at a 6.4% annual increase versus an expected 6.2% – stocks plunged into negative territory and spent the rest of the session trying to get out. At the end of US markets, the S&P and Dow finished in the red, down 0.03% and 0.46%, respectively, while the Nasdaq managed to finish up 0.57%.

Data provided by TradingView shows that Bitcoin’s (BTC) price rallied after the CPI announcement, hitting a low of $51,582 before rising to an intraday high of $22,370 and finally settling near support at $22,250.

BTC/USD 4-hour chart. Source: TradingView

The positive move for BTC was made by a surge in Bitcoin futures prices in early trading on Tuesday, according to Kitco senior technical analyst Jim Wyckoff, who noted that “A new price downtrend is now in place on the daily bar chart.”

As it stands, “the bulls have lost their technical advantages in the short term,” Wyckoff said, warning that “The current path of least resistance for prices is sideways to lower.”

Bitcoin price shows signs of rolling over

While many have taken the performance of cryptos so far in 2023 as a positive sign that the crypto winter is over, Mike McGlone, senior macro strategist at Bloomberg Intelligence, issued a warning that the price action of risk-asset options indicates the market may be undergoing a bear market while Bitcoin seems to roll over.

The primary options for risk assets in Q1 appear to be either a pullback or a bottom, and a growing leading indicator – #Bitcoin – can tip over. Benchmark crypto pulls back from resistance while top headwind remains: ‘Don’t fight the Fed.’ pic.twitter.com/k0dWnmbuGi

— Mike McGlone (@mikemcglone11) 13 February 2023

According to McGlone, “Bitcoin hit its steepest discount to its 200-week moving average at the end of 2022. This is a major reason for the 1Q snapback, but the global economic slowdown still looks unfavorable.” The senior macro strategist went on to note that the trajectory for BTC remains bearish, as shown by Bitcoin’s 52-week moving average.

The Federal Reserve and its future actions related to interest rates remain the most influential force in markets at the moment, McGlone said, and investors would be wise to take the Fed’s actions into account when making investment decisions.

“Fed tightening despite the risk of recession may be a primary headwind for most risk assets, especially crypto. Buy and hold strategies may benefit at the expense of the more speculative and leveraged, which are subject to increasing volatility typical in bear markets, McGlone concluded.

Altcoins are regaining lost ground

The altcoin market was mostly in the green in trading on Tuesday as traders looked to shake off the recent FUD and open positions in their favorite low-cap cryptos.

Daily performance in the cryptocurrency market. Source: Coin360

All but six tokens in the top 200 traded higher, led by a 28.78% gain for SingularityNET (AGIX), which climbed to $0.4566. Other notable performances include a 21.47% gain for Hashflow (HFT), a 21.18% increase for Fetch.ai (FET) and a 19.56% gain for MAGIC (MAGIC).

The total cryptocurrency market cap is now $1.028 trillion, and Bitcoin’s dominance rate is 41.6%.