Bitcoin recovers after falling, but remains under pressure from economic instability

Bitcoin has partially recovered from its fall, but remains under pressure due to economic instability in the United States. Its rate rose by 1.3% to $97,873, while investors are waiting for new inflation data that could affect the market. Writes UNN with reference to Investing.

Details

After a sharp drop over the weekend, bitcoin is gradually recovering its position. As of 09:21 EDT , its value rose by 1.3% to $97,873. However, the overall situation in the crypto market remains tense due to US economic policy and global financial risks.

Last week, bitcoin lost more than 4% due to the escalation of the trade war between the US and China. U.S. President Donald Trump announced new tariffs on aluminum and steel imports, which led to a response from China, which imposed restrictions on U.S. exports. These measures caused investor concern and led to a loss of liquidity in the financial markets, particularly in the cryptocurrency sector.

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Despite the widespread belief that bitcoin is a hedge against economic instability, recent events show that it is also affected by macroeconomic changes. The US dollar continues to strengthen, which puts pressure on the crypto market, as the rising US currency makes alternative assets less attractive to investors.

Traders' attention is now focused on the US inflation data to be released on Wednesday. The Consumer Price Index (CPI) is expected to rise by 2.9% on an annualized basis, which could affect the Federal Reserve's policy. If inflation remains high, it may reduce the likelihood of interest rate cuts in the US, which will further affect the cryptocurrency market.

Strategy continues to buy bitcoin

Despite the market volatility, Strategy (formerly MicroStrategy) continues to actively invest in bitcoin. Between February 3 and February 9, the company purchased 7,633 BTC worth $742.4 million, increasing its total assets in the cryptocurrency to 478,740 BTC, which is equivalent to $46 billion.

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According to the company's co-founder Michael Saylor, Strategy's total investment in bitcoin already exceeds $31.1 billion, and the average purchase price is $65,033 per coin. Thus, the company owns more than 2.2% of all bitcoins in existence, taking into account the limited issue of 21 million BTC.

The last purchases were made by selling shares:

• 516,413 Class A ordinary shares for $179 million

• 7.3 million Series A Preferred Shares with a yield of 8.00% for $563.4 million

Currently, Strategy has $4.17 billion in available shares under the 21/21 program, which aims to raise $42 billion for further investment in bitcoin.

What is happening in the cryptocurrency market?

Bitcoin is not the only cryptocurrency that is showing a correction after a sharp drop. Some other assets are also growing along with it:

• Ethereum (ETH) rose by 1.3% to reach $2,661.26

• XRP rose by 1.1% to $2,442

• Solana grew by 4.2%, Cardano - by 3.1%, while Polygon remained unchanged

• Dogecoin showed a slight increase of 0.5%, and the $TRUMP token lost 3.3%

Prospects for bitcoin

The market situation remains volatile, and the future of bitcoin largely depends on economic decisions in the United States. If the Fed refrains from cutting interest rates, it could weaken the cryptocurrency's appeal to investors. At the same time, strategic purchases by large companies such as Strategy indicate a long-term belief in bitcoin's growth.

The next few days will be key for the crypto market, as inflation data and the Fed's reaction may determine the future course of bitcoin.

Recall

Last week, bitcoin continued to fall, posting its second consecutive weekly decline amid a decline in global risk appetite following US President Donald Trump's announcement of new tariffs, which heightened fears of global trade tensions.