Bitcoin soared to its highest point since June before gains were mostly wiped out.

Bitcoin briefly broke $26,500 shortly after the release of U.S. inflation data for February, which met consensus estimates. By 4:10 p.m. EST, it was trading around $25,085, having surrendered most of its post-CPI gains. 

"Markets are moving sharply higher on improved sentiment despite seemingly little fundamental change," GSR analysts noted in a market update earlier in the day. Yet, despite the lack of a fundamental change, bitcoin trended across social media as some commentators began to whisper one of Crypto Twitter's favorite phrases — "we're so back."

The joy was short-lived as bitcoin came started declining amid reports that a U.S. drone collided with a Russian fighter jet over the Black Sea.  

Beyond rising geopolitical tensions, the Fed's next interest rate decision on March 22 is also sure to drive markets. Fed funds futures pricing suggests a 25-basis point increase is the most likely outcome, and some commentators suggest it could be a 25-basis point cut. 

A "somewhat worrying trend is that core service excluding housing (aka 'supercore') continued to move up month-on-month," said Liz Young, head of investment strategy at SoFi, adding that this is a key indicator for the Fed.