Bitcoin Hits $100K Amid U.S. Inflation Slowdown

Bitcoin reached $100,715 on Wednesday, boosted by the U.S. Consumer Price Index (CPI) report showing cooling inflation. Core inflation slowed to 3.2% in December, fueling hopes for a Federal Reserve pivot on interest rates.

Cooling Inflation Sparks Optimism

The December CPI held steady at 2.9%, while the core CPI fell for the first time since July. This strengthened expectations that the Fed might pause or lower interest rates, creating a favorable environment for risk assets like Bitcoin.

Bitcoin’s Surge Linked to Market Trends

Bitcoin’s price closed at $99,493, up 7% over two days. Analysts highlighted strong macroeconomic signals, including the S&P 500 nearing key resistance levels, as drivers behind the rally.

Rising Correlation with Nasdaq 100

Bitcoin’s correlation with the Nasdaq 100 hit a two-year high, reflecting its sensitivity to macroeconomic shifts. Experts like Jag Kooner noted that Bitcoin’s price moves are now closely tied to broader financial markets.

Liquidations Fuel Bitcoin Rally

Data from Coinglass showed $169 million in short liquidations, with Bitcoin accounting for over $63 million. Rising Bitcoin futures funding rates indicate stronger bullish sentiment in the market.

Broader Crypto Market Rally

The CoinDesk 20 index gained 7%, while crypto-related stocks like Coinbase and MicroStrategy rose 7% and 5%, respectively. Ethereum and Solana also saw gains, reflecting renewed investor confidence.