Bitcoin Climbs Near $100K Amid Softer Inflation Data
Bitcoin surged closer to the $100,000 mark after softer-than-expected US inflation renewed interest in riskier assets, including cryptocurrencies. On Wednesday, Bitcoin peaked at $99,776 before pulling back slightly. This marks its closest approach to the milestone since hitting it briefly on Jan. 7.
US Inflation Sparks Optimism in Crypto and Stock Markets
The latest US inflation report showed a 2.9% year-over-year increase in prices, meeting expectations. Month-over-month core inflation registered at 0.2%, below analyst predictions. The softer data eased market concerns over the Federal Reserve’s scope for further interest-rate cuts.
This favorable inflation reading boosted the S&P 500 and Nasdaq 100 indexes by over 1% and created a positive environment for Bitcoin and other digital assets.
Bitcoin-Equity Correlation Hits a Two-Year High
Bitcoin’s 30-day correlation with the Nasdaq 100 Index climbed to approximately 0.70, highlighting its strong link to tech stocks. A reading of 1 signals lockstep movement, while -1 indicates inverse correlation.
This growing correlation reflects Bitcoin’s sensitivity to broader market trends, particularly interest-rate expectations.
Market Speculation Builds Ahead of Trump’s Inauguration
With President-elect Donald Trump set to take office on Jan. 20, market participants are bracing for potential policy shifts. Trump’s pledges to support the crypto industry and make the US a global crypto hub contrast with concerns over inflationary tariffs and immigration policies.
“The days leading up to the inauguration could see notable momentum in the crypto market,” noted K33 Research analysts.
Options Market Signals Anticipation of Volatility
Hedging activity in the Bitcoin options market indicates that traders are preparing for potential volatility. Sean Dawson, Head of Research at Derive.xyz, noted an increase in bearish bets as investors position for downside risks tied to upcoming policy announcements.
Will Bitcoin Break Through $100K Again?
Bitcoin’s resurgence reflects broader market optimism, but uncertainties remain as Trump’s policies come into focus. Softer inflation, combined with rising institutional interest, may pave the way for Bitcoin to break new records in the near future.