Bitcoin price was trading higher on Wednesday, adding to Tuesday’s gains. The largest cryptocurrency by total market capitalization has been on a two-day rally against the backdrop of a lower inflation printout in the United States. At the time of writing, Bitcoin was trading 2.56% higher at $22,761.83.

Optimism Abound

Bitcoin price has been hovering above the important level of $22,000 over the past day as traders embraced a lower-than-expected decline in inflation. Data by the US Bureau of Labor Statistics on Tuesday showed that there was a significant rise in CPI in January on the back of the high shelter and energy costs.

Notably, in reaction to the US inflation data, the US benchmark 10-year Treasury yield rose to its highest level this year, boosting the dollar index. This saw US stocks and cryptocurrencies inch higher as investors brace themselves for a hawkish Fed.

Additionally, the easing of concerns over cryptocurrency regulations has offered significant support in the crypto sector. According to data by CoinMarketCap, the overall crypto market cap has increased 2.78% over the last day to $1.05 trillion. Bitcoin’s dominance has also risen over the last day.

As such, Bitcoin is expected to extend its two-day rally but with a slow grind. The digital asset is expected to move higher but is likely to remain below the important level of $23,000.

Bitcoin Price Analysis

Bitcoin price has been steadily hovering above the $22,000 level over the past day after receiving a bullish push from the market. The crypto leader has climbed by more than 4% over the past 24 hours, pointing to a strong bullish momentum.

On the 4-hour chart, BTC has managed to move slightly above the 25-day and 50-day moving averages. Its Relative Strength Index (RSI) has moved higher into the neutral level. Therefore, in the short term, I expect BTC to trade within the tight range of $22,000 and $23,000.