Bitcoin and most altcoins continued their recent rebound after the US published mixed consumer inflation data.
Bitcoin (Bitcoin) to $99,000 for the first time since January 7, up 10% from its monthly low. This recovery has led to further gains across altcoins, with the Virtuals protocol (hypothetical), ai16z (AI16Z), and the gorand (Something) which rose by more than 13%.
The rally has extended beyond cryptocurrencies to include other asset classes. Futures linked to the Dow Jones Industrial Average rose 700 points, while contracts linked to the S&P 500 rose about 100 points. Meanwhile, bond yields fell, with 10-year, 30-year and 5-year bond yields falling to 4.66%, 4.90% and 4.48%, respectively.
A report from the US Bureau of Labor Statistics showed that the core CPI fell from 0.3% in November to 0.2% in December. On an annual basis, the core inflation rate fell from 3.3% to 3.2%.
However, the headline CPI rose from 0.3% to 0.4% in December, which means an annual increase of 2.9%.
Bitcoin and other altcoins rose in response to encouraging core inflation data. The Fed closely monitors core inflation, which excludes volatile food and energy prices. The decline in the core CPI has increased market expectations that the Fed may make more than two rate cuts this year.
While the inflation report provided some optimism, risks remain. Inflation remains above the Fed's 2.0% target, and there are signs that it may remain elevated for longer. The ongoing fires in Los Angeles can contribute to higher costs for services such as insurance and rent.
In addition, some of Donald Trump's policies, such as mass deportations and tariffs, may lead to higher inflation pressures this year.
Bitcoin price analysis
The daily chart shows that Bitcoin has been on a steady rebound over the past few days. This recovery began after the formation of a long-legged doji candlestick pattern on Monday, which is often seen as a bullish reversal signal.
Bitcoin crossed the 23.6% Fibonacci retracement level at $94,210 and crossed the 100-day EMA. It also crossed the $91,535 level, a key support level it has held since November.
Looking ahead, Bitcoin may continue to rise in the coming days as investors anticipate the inauguration of Donald Trump next week. If the bullish momentum continues, the cryptocurrency could retest its all-time high of $108,000. However, a drop below this week's low of $89,000 would invalidate the bullish outlook.
Source link