Cryptocurrency analysts are taking a bullish stance following positive US inflation data that propelled Bitcoin’s value by approximately 3%. This surge is linked to the potential for further interest rate cuts, which are generally advantageous for crypto assets. On January 15, the US Consumer Price Index (CPI) revealed lower-than-anticipated core inflation for December, elevating Bitcoin’s spot price from around $96,000 to nearly $100,000, alongside boosts in stocks and gold.
Futures markets are currently indicating a 30% probability of the Federal Reserve reducing interest rates in March, according to CME FedWatch. Such rate cuts typically support cryptocurrencies. Bryan Armour from Morningstar noted that Bitcoin’s trading behavior is akin to value storage assets like gold, suggesting that cooling inflation could uplift Bitcoin prices.
Observations indicate that Bitcoin futures for February to April have risen by 2%–3%, reflecting a more optimistic medium-term outlook for the cryptocurrency. However, the sustainability of this price rally might depend on whether President-elect Donald Trump enacts pro-crypto policies after his inauguration on January 20. John Glover of Ledn commented on the positive interpretation by the Bitcoin market of potential rate cuts, which is helping push prices higher. Nonetheless, he anticipates ongoing volatility until there’s clear movement on regulatory relaxation for cryptocurrency.
Following Trump’s victory in the November 2024 elections, he pledged to appoint leaders favorable to the crypto industry and expand the US’s role as a crypto hub. Since mid-December, Bitcoin’s value declined by around 10% from its peak of $106,000 to approximately $96,000 as of January 14, driven by macroeconomic challenges and inflation concerns. Some analysts now suggest Bitcoin could be ready for a relief rally, with market froth diminishing while demand remains steady, as highlighted by crypto data firm Glassnode. They also indicated that Bitcoin’s price continues trading above crucial support levels, maintaining a bullish market structure.