Bitcoin once again grabbed headlines with a tumultuous trading day on Tuesday, initially soaring to a record valuation above $73,000 before abruptly plunging by 6%. However, the leading digital asset demonstrated resilience, swiftly recouping some losses to hover around $71,150.

This volatile trading session led to the liquidation of over $360 million in leveraged derivatives positions across all cryptocurrencies, as per CoinGlass data. This represents the largest long liquidation since the market correction observed on March 5.

Despite the day's turbulence, investment firm Matrixport suggests that while bitcoin's rally may show signs of slowing down, it could potentially resume after a period of consolidation. The firm noted a discernible disparity between bitcoin's elevated prices and its declining relative strength index (RSI), hinting at a possible need for the crypto to stabilize before resuming its upward trend.

The unexpected surge in the U.S. inflation index for February, reaching 3.2%, may impact the Federal Reserve's decisions regarding interest rate adjustments. However, Nansen analyst Aurelie Barthere believes that this uptick is unlikely to hinder the bullish momentum, particularly in the crypto market.

Barthere explained, "Crypto remains firmly bullish. While there may be some adjustments in expectations regarding Fed rate cuts, we don't anticipate a significant crypto sell-off, as similar adjustments have occurred previously without derailing the bullish trajectory."