A seven-day price chart of Bitcoin captured from CoinMarketCap, Tuesday. Courtesy of CoinMarketCap

By Lee Min-hyung

Bitcoin is on a technical rally, surpassing the $17,000 mark for the first time in about a month on diminishing inflation concerns.

According to data from market tracker CoinMarketCap, Bitcoin was traded at $17,217 as of 3:30 p.m. Tuesday. The world's largest cryptocurrency by market capitalization reached around $16,400 at the end of 2022, but got back on track for a gradual rebound as of the beginning of this year.

The price movement of Ethereum also showed a similar pattern during the same period. Ethereum was traded at around $1,190 on Dec. 31 last year, but recovered to more than $1,320 as of Tuesday afternoon.

This raised hopes for the crypto market to bounce back this year after the industry suffered a year-long downfall in the aftermath of steep rate hikes here and abroad. A growing sense of expectation that inflation has peaked also increases the likelihood for major cryptocurrencies to extend recovery momentum.

Market analysts also welcomed the sign of a rebound in the crypto market, but said it is still too early to say that the market has entered a stable path toward recovery.

"A weaker dollar and a better risk environment are bringing cryptocurrencies some relief, with Bitcoin breaking back above $17,000 to trade at its highest level in more than three weeks," Craig Erlam, senior market analyst at OANDA, said. "It will take a lot more than that to considerably lift crypto from its lows, but this is certainly a welcome start."

The remark came at a time when the U.S. Fed has entered a final cycle of its rate hikes. Major investment banks abroad forecast the Fed to finish its rate hike cycle at a range of 5 to 5.25 percent by pushing for a couple more rate hikes from the current range of 4.25 and 4.5 percent.