Bitcoin recovers to $18,000; investors await the US CPI

The cryptocurrency market has rebounded strongly. Bitcoin (BTC) has soared 3.8% in the last 24 hours and is comfortably surpassing the $18,000 mark, thus reaching the highs of a month ago, when it briefly touched this level. Ethereum (ETH), meanwhile, has risen more than 4.5% and is testing the $1,400 mark.

Different analysts point out that this remarkable rise is due to the expiration tomorrow, on Friday, of $275 million in weekly BTC options and that investors are waiting for a good reading of the Consumer Price Index (CPI) in the United States to prove that the Federal Reserve's (Fed) effort to slow down the economy and reduce inflation is achieving the expected results.

"Bitcoin is capitalising on the improvement in risk appetite that we're seeing in the broader markets, rallying more than 4% today before paring gains just shy of the December peak. After weeks of treading water between $16,000 and $17,000, cryptos have been given new life by the jobs report and the risk rally that has ensued. Another positive inflation reading today could see it trading at levels not seen since the early days of the FTX collapse,​" stated Craig Erlam, senior markets analyst at Oanda.

Despite the Fed repeatedly reiterating its stance to keep interest rates at high levels through 2023, markets continue to expect the central bank to end or cut rate hikes later this year.

"Despite the fact that most institutional clients think we are probably going to enter a recession, they don't seem to be afraid of it," explained Morgan Stanley's chief investment officer, Mike Wilson, in an interview with CNBC on Tuesday. According to this expert, there is a great disconnect between investors' stance and the real market situation and he warned that the S&P 500 index is vulnerable to a 23% drop to 3,000 points in the event of this slowdown.

Wilson also stressed that there will be a significant earnings tightening in the earnings season that will face its first challenge on Friday with the release of quarterly figures from numerous U.S. banks.

"If risk appetite remains intact in the wake of the inflation report, Bitcoin could return to $18,500," noted Edward Moya, senior analyst at Oanda. Conversely, and he added, if "underlying prices prove worrisome, Bitcoin could pull back toward the December lows."

"As for the cryptos itself, the price action continues to consolidate. The trading volume in the crypto space has fallen to a remedial level. That indicates that traders are not willing to involve unless there is a clear uptrend in place," stated Naeem Aslam, who believes that, overall,optimism prevails in the market. "Traders are optimistic as there are fewer bad players involved in this space than a year ago, and we continue to see the cleansing of bad actors from its space which is certainly a positive factor for the future of this industry," he added.

FTX also announced that it has recovered more than $5 billion in liquid cash and cryptoassets that it will use to pay its creditors, as one of the company's lawyers confirmed on Wednesday.

"We have located over $5 billion in cash, liquid cryptocurrencies and liquid investment securities," Andy Dietderich, FTX's attorney, told a bankruptcy judge in Delaware at the start of the hearing earlier in the day.

On the other hand, Binance announced that it will hire around 700 workers after receiving the go-ahead from Sweden to operate in the Nordic country. The situation of the world's leading exchange contrasts sharply with that of Coinbase, which recently reported that it will execute a hefty workforce cut to reduce its operating expenses.

Likewise, Binance's U.S. subsidiary received the approval of the U.S. courts to buy the assets of the bankrupt Voyager Digital for $1 billion. It should be recalled that the United States is investigating Changpeng Zhao's platform for possible money laundering in US territory.

In other market news, there have been generalized increases. Binance coin (BNB), Ripple (XRP), Cardano (ADA), Dogecoin (DOGE) and Polygon (MATIC) have risen over 2%. Polkadot (DOT) is one of the tokens with the highest gains on Thursday, soaring more than 4% and reaching over $5.