Bitcoin price approached the psychological barrier of $100,000 following December's inflation increase in the United States. Along with BTC, altcoins also rose as investors anticipate the Federal Reserve may be forced to cut rates sooner than planned13.
Why is Bitcoin Up? US CPI Inflation Rose 0.4% in December 2024
On Wednesday, January 15, 2025, the US Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) increased by 0.4% last month.
"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent on a seasonally adjusted basis in December, after rising 0.3 percent in November. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment," the BLS commented.
The higher monthly inflation reading caused the CME FedWatch tool to indicate a 30% probability of a rate cut at the March meeting. The cryptocurrency market, anticipating interest rate cuts, saw Bitcoin jump 1.4% to $98,500 immediately after the report, eventually reaching a local daily high of $99,400.
This price action validated yesterday's bullish doji candle (or pin bar) formation, which emerged when BTC briefly dipped below $90,000. If the trend continues, surpassing the $100,000 level should only be a matter of time. This would pave the way for Bitcoin to retest its all-time high above $108,000.
"Crypto remains a key indicator of risk assets, and with CPI and inflation figures exceeding expectations, this improvement is evident in current pricing,” Paul Howard, Senior Director at Wincent, commented for Finance Magnates. “As a leading liquidity provider in digital assets, we anticipate a highly volatile week ahead, particularly with the transition of administration in the US, which could result in +/-10% price swings for major assets like BTC, SOL, ETH, and XRP.”
Why Is Crypto Up Today? Ethereum and Other Altcoins Follow Bitcoin's Lead
Altcoins quickly followed Bitcoin's lead. Ethereum, the second-largest cryptocurrency by market capitalization, rose 3% in the past hour to $3,300, while XRP jumped 2.6% to $2.57.
The total cryptocurrency market capitalization increased by 5.6% to $3.33 trillion, with daily trading volume surging 25% to $154 billion according to CoinMarketCap data.
“Market pricing will likely respond to announcements made by the incoming President, suggesting that current valuations may not fully account for upcoming news,” added Howard. “Many of these expected announcements are likely to have long-term implications throughout the year, especially in areas such as regulatory clarity, adjustments to banking policies, and leadership in matters like a strategic bitcoin reserve.”
This article was written by Damian Chmiel at www.financemagnates.com.
You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.
Comments