Bitcoin hit its highest level since the early February sell-off and climbed above $76,000. The rally coincided with the release of US inflation data, which turned out softer than expected despite an overall rise in producer prices in March.
Additional support for the market came from falling oil prices and strong performance in the stock market. Against this backdrop, demand for risk assets increased.
According to market data, during the US morning session BTC confidently held above $76,000. Over the past 24 hours, the total crypto market capitalization grew by about $110 billion.
Bitcoin price dynamics. Source: TradingView
Much of the participants’ optimism is tied to expectations for Fed policy. Investors are increasingly pricing in a softer scenario, and geopolitical factors are only amplifying this effect.
Stock Market Rises, Shorts Get Squeezed
The rally affected more than just crypto. US stock markets also surged sharply, and much of it looked like a classic short squeeze.
According to analysts, in just two days US indices added about $1.4 trillion in capitalization. The market was literally “bought up” after the inflation data release.
The main driver was the tech sector. Nasdaq rose by 2.85%, adding about $960 billion. The Russell 2000 index, which tracks small-cap companies, gained about 3%. S&P 500 climbed by 2.12% and approached a new all-time high.
Additional support came from easing tensions in the Middle East. Against this backdrop, WTI oil fell by about 6% and settled around $93 per barrel.
For those betting on a decline, all this turned into a harsh blow.
The sharp rise in bitcoin triggered a chain reaction of liquidations. According to the derivatives market, in just one hour, more than $100 million in positions were closed.
Crypto market liquidation dynamics. Source: CoinGlass
Overall, liquidations across the market quickly exceeded $650 million. The main blow was to short sellers.
Traders betting on a decline lost about $514.94 million. This is the largest volume of short liquidations since the volatility in February.
Against this backdrop, the head of analytics platform Alphractal Joao Vedson noted:
“Today, almost all the bears were liquidated. And this happened exactly on April 14—a rather curious and ‘fractal’ date for bitcoin.”
Inflation Pressures Rate Expectations
The main trigger for the market rally was fresh US inflation data. This refers to the producer price index for March, which was weaker than forecasts, although overall price pressures remain.
Annual inflation was 4%, while the market expected about 4.7%. At the same time, the figure still accelerated compared to February’s 3.6%, reaching the highest level in three years.
On a monthly basis, growth was 0.5%. This matches the previous month but is significantly below expectations of 1.1%.
The core index, excluding food and energy, remained at 3.8% versus a forecast of 4.2%.
Despite the softer numbers, the upward trend remains. Market participants link rising inflation to geopolitics, including the US-Iran conflict, which has driven up energy prices.
And this is where the key tension arises.
See also: Bitcoin Has Passed Half of the Halving Cycle to 2028
On the one hand, the data was better than expected. On the other, inflation remains high enough to keep pressure on the Fed.
In such conditions, the market has to revise its expectations. The likelihood of a rapid rate cut is decreasing, and the “higher for longer” scenario is back in focus.
Historically, this means one thing: liquidity contracts.
Expensive money puts pressure on risk assets, including bitcoin and tech stocks, as capital starts to flow into safer, yield-bearing instruments.
The Role of Bitcoin Is Debated Again
Amid the rise of BTC, the market has returned to an old question: how does BTC behave during geopolitical crises?
According to Bitwise CIO Matt Hougan, since late February bitcoin has outperformed many traditional assets. Since the US and Israeli strikes, it has risen about 12%, while the S&P 500 lost about 1% and gold dropped by 10%.
Bitcoin and traditional asset dynamics. Source: Bitwise
These numbers cast doubt on the usual belief that BTC always falls in any crisis due to its volatility.
Now, there is growing talk that bitcoin has two roles.
The first is already familiar. It is a limited digital asset that competes with gold and other stores of value.
The second is newer and more controversial.
This is the idea that bitcoin can be used as a tool for international settlements in a world where the financial system is becoming increasingly fragmented.
This idea began to gain traction after Russian banks were disconnected from SWIFT. At that time, many countries began to consider how to reduce dependence on Western financial infrastructure.
And the current conflict is fueling this discussion again.
The greater the geopolitical tension, the higher the interest in neutral payment instruments that are not tied to specific states. However, there is still no clear answer.
Bitcoin still depends heavily on rates, liquidity, and stock market movements. But the very fact that it is being considered in this context is already becoming a noticeable part of the market agenda during crises.
