Bitcoin recovers from AI-led selloff as US inflation eases
Bitcoin and major altcoins bounced back from an AI-triggered equity contagion, though conflicting technical signals leave the market's short-term direction uncertain.
Bitcoin and major cryptocurrencies have recovered from a sudden sell-off triggered by an AI-driven selloff in technology equities. The contagion saw Bitcoin briefly plunge below $62,500 before buyers stepped in, allowing the largest digital asset to stabilize. Ethereum and a basket of leading altcoins followed a similar trajectory, paring earlier losses.
Over the past 24 hours, Bitcoin posted a 1.77% gain. Ethereum rose 0.93% to trade at $1,843. The broader altcoin market mirrored this recovery, with BNB, XRP, Solana, Hyperliquid, Dogecoin, and Cardano all posting advances of up to 4.81%.
The rebound was largely underpinned by favorable macroeconomic data out of the United States. “Bitcoin briefly below $62,500 as investors adopted a risk-off approach. However, softer-than-expected U.S. inflation data later in the week eased concerns around further interest rate hikes, helping both Bitcoin and Ethereum recover,” said Piyush Walke, Derivatives Research Analyst at Delta Exchange.
Despite the positive price action, the underlying technical picture remains fragmented. Walke noted that the rebound lacked the strength necessary to form higher highs. Crucially, Bitcoin has slipped back below its 50-day moving average, a level that keeps the broader downtrend intact despite the temporary relief rally.
Other market participants highlighted even stronger localized breakouts before broader profit-taking intervened. Harish Vatnani, Head of Trade at ZebPay, observed that Bitcoin broke through resistance at $64,200 to hit $65,600. Similarly, Ethereum reached a fresh high of $1,946 before retreating. Vatnani attributed these subsequent pullbacks to fresh geopolitical tensions and automated profit booking aligned with a concurrent US equity market sell-off.
Vatnani added that the daily Relative Strength Index (RSI) for Bitcoin has maintained above the 50 mark, a metric that traditionally reflects bullish momentum. However, investors remain cautious. The market is currently waiting for clearer direction from US regulatory bodies and upcoming macroeconomic signals to confirm whether this recovery marks a true trend reversal or merely a temporary respite in a broader risk-off environment.
