The cryptocurrency market bounced back from the early-week shocks following the US January inflation statistics, indicating that inflation is probably going to stay higher than anticipated. Investors are frightened by the news stories about US regulators assaulting stablecoins.

After early-week worries, Bitcoin climbed higher and reclaimed the $22,000 level. Ethereum, its biggest rival, increased by more than 3% to hold close to $1,550. A few alternative coins, though, outperformed the blue-chip coins and saw gains of up to 25%.

Several cryptocurrencies saw a boost after January’s US Consumer Price Index (CPI) data revealed less inflation than anticipated.

“The support is at the $22,000 level, while the next resistance for BTC is now at the $22,260 level. In addition, Ethereum followed Bitcoin’s rise and returned to the $1,500 mark.

Except for the US dollar-pegged stablecoin Tether, all of the top-tier cryptocurrencies saw significant price increases on Wednesday. Cardano saw a gain of over 8%, while Polygon saw a 6% increase. Avalanche rose 4% on the day, while Litecoin increased by more over 5%.

More than 2% more had been added to the market capitalization of all cryptocurrencies in the previous day, pushing it up to $1.02 trillion. The overall trading volumes, however, were essentially unchanged, increasing by about 3% to just under $57.92 billion.

According to Sathvik Vishwanath, Co-Founder & CEO at Unocoin, further SEC pressure and regulation of the cryptocurrency business, such as the inspection of stablecoin securitization, could cause greater market instability and confusion.

The price index of personal consumption expenditures, or PCE, the Fed’s favoured inflation indicator, is released on February 24. On March 14, the subsequent CPI report is due.

Crypto updates

Since Monday, more than $700 million worth of BUSD tokens have been burnt by Paxos, the company that created the $16 billion Binance USD (BUSD) stablecoin. According to blockchain data, Paxos indicated at that time that it would stop issuing the coin due to increasing regulatory pressure.

Bitcoin (BTC) is currently trading above $22,000, down 5% on a weekly basis. Following the release of US inflation statistics today, BTC experienced a mini-rally. BTC may be ready for a promising uptrend thanks to the strong support it has below.

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