Bitcoin's price has notably rebounded, climbing back above $70,000 on Saturday. This recovery follows a challenging period characterized by significant losses and investor anxiety, and has been fueled by cooler-than-expected U.S. inflation data which has reinvigorated risk appetite across various markets. At press time, Bitcoin was trading around $70,215, marking an approximate 2% increase over the preceding 24 hours, with daily trading volume near $43 billion. This ascent positions the cryptocurrency just shy of its seven-day high of $70,434, pushing its global market capitalization back above $1.4 trillion.

The catalyst for this recent upward movement was January's Consumer Price Index report, which revealed inflation rising at 2.4% year-over-year, slightly below the anticipated 2.5% forecast. This softer inflation reading has intensified expectations that the Federal Reserve might initiate interest rate cuts sooner than previously projected. Such a monetary policy shift typically benefits higher-beta assets like cryptocurrencies, making them more attractive to investors. Prediction markets quickly reflected this change in sentiment, with traders on Kalshi increasing the implied odds of an April rate cut to 23%, and Polymarket pricing also moving upwards throughout the week.

The weekend's rebound in Bitcoin's price also positively impacted crypto-linked equities. On Friday, Coinbase (COIN) shares surged by 18%, while Strategy (MSTR) jumped 10%, as investors re-allocated capital towards digital-asset exposure. This occurred even as Coinbase navigates a complex earnings landscape, including a substantial $666.7 million loss in a recent fourth quarter, primarily attributed to weaker trading revenue. Strategy, meanwhile, continued its close correlation with Bitcoin's volatility, reiterating its long-term treasury strategy. The company recently disclosed another significant Bitcoin acquisition of over 1,100 BTC and reported a steep quarterly loss driven largely by mark-to-market declines on its existing holdings, underscoring the balance-sheet risks associated with its aggressive positioning.

The recent rebound follows a tumultuous period for Bitcoin, which had slid sharply from its recent peaks into the mid-$60,000 range after an extended multi-month downturn. The sell-off intensified in early February when BTC breached the crucial $70,000 psychological level. Research firm K33 suggested that the plunge toward $60,000 might have marked a 'local bottom,' citing 'capitulation-like conditions' observed in trading volume, funding rates, options positioning, and ETF flows. Despite this rally, a deeper sense of unease persists within the market. The Crypto Fear & Greed Index remains entrenched in 'extreme fear,' levels that were last seen during the 2022 bear market and amidst the collapse of major industry participants, indicating a cautious investor sentiment underlying the current price movements.