US inflation soared to a 39-year high of 7% in December, data showed on Wednesday, but stocks were unfazed.
Led by President Nayib Bukele, El Salvador has bought at least 1,391 bitcoins using public funds, according to a Bloomberg estimate.
But bitcoin is notoriously volatile, and previous moving-average crossovers have also led to several head fakes.
Only just 5% of the bank's clients expect bitcoin to hit the $100,000 mark. Bitcoin dipped below $40,000 Monday to its lowest since September.
Bitcoin has tumbled 11% since the start of the year, and sits roughly 40% below its record high of $69,000 reached in November.
"Bitcoin looks oversold in the short-term," DailyFX said. "A confirmed break below $39,600 would likely trigger further selling down to $37,500."
More than 25 cryptocurrencies with a value of at least $1 billion have erased 10% or more in market cap over the past week.
The Fed could pull back its support even faster than expected, spelling trouble for risky assets like bitcoin.
A sustained decline below $44,200 would put bitcoin's next support level of $37,400 in play, according to Katie Stockton of Fairlead Strategies.
Bitcoin's market share will likely rise as more institutions turn their eye towards digital assets, Goldman Sachs predicted.
"I think bitcoin as an inflation hedge in the minds of many of the younger investors has replaced gold," the Wharton professor told CNBC.
The crypto-loving president also projected two more countries will adopt bitcoin as legal tender, though he did not specify which.
The S&P 500 edged higher to clinch its 70th record for 2021 while the Dow Jones Industrial Average also edged up to mark its sixth consecutive win.
Bitcoin "remains solidly in a long-term uptrend... and our long-term gauges still point higher despite having down-ticked this month," Stockton said.
Cryptocurrencies are rising across the board, shaping up for a "Santa Claus rally" to close the year on a high note.
He's never sold any of his tokens, and in general, he doesn't "believe you should sell your bitcoin," The Information reported.
Worries over the Omicron variant has injected volatility into markets, as investors have reacted to each new data point or announcement.