Crypto Prices Rebound Amid Inflation Data and Trump’s Crypto-Friendly Plans
Market Analysis
Crypto prices bounced back from Monday’s wipeout, with Bitcoin (BTC) rising as high as $97,300 on Tuesday. Traders are keeping a close eye on the latest batch of US inflation data, with more reports to come tomorrow.
The largest crypto’s dip below $90,000 yesterday was quickly bought up on reports that Donald Trump is preparing executive orders that benefit the crypto industry. The advance continued today, supported by softer than expected US Producer Price Index (PPI) readings for December.
Market Performance
BTC recently changed hands at $96,500, up 3% over the past 24 hours. The broad-market benchmark CoinDesk 20 Index outperformed, gaining 5%. Ripple’s XRP and dogecoin (DOGE) led altcoin majors, with 6%-7% advances.
In traditional markets, the tech-heavy Nasdaq and the S&P 500 closed roughly flat.
Consolidation and Volatility
Zooming out, Bitcoin is still consolidating sideways above $90,000 while soaring bond yields and the US dollar shook markets across the globe over the past weeks. Market participants have already scaled back expectations for lower interest rates in the US this year amidst recent hot US economic data releases.
Wednesday’s Consumer Price Index (CPI) report could inject another burst of volatility to markets and provide further clues for traders into the Federal Reserve’s policy trajectory for the year.
Trump’s Inauguration and Crypto Market Impact
Looking past that, Trump’s inauguration ceremony slated for January 20 could also move markets as anticipation builds for the incoming president’s pro-crypto actions.
K33 Research previously projected that the inauguration could be an opportunistic sell-the-news event amidst heightened expectations, but the early-year sell-off in stocks and digital assets made the firm revise its view.
“While our monthly outlook favored selling the inauguration, we’d like to rephrase this strategy as selling BTC at the inauguration is considerably less appealing unless the coming six days offer a substantial resurfacing of momentum” the report said. “The S&P 500 closed its post-election gap yesterday, and BTC reached 2-month lows.”
“De-risking would be entirely path-dependent on next week’s price action and short-lived in nature as we hold bullish long-term expectations for Trump’s impact on BTC,” the authors added.
Conclusion
In conclusion, crypto prices are rebounding amid inflation data and Trump’s crypto-friendly plans. The market is expected to remain volatile, with the CPI report and Trump’s inauguration ceremony being key events to watch. While some analysts are cautious about the potential impact of the inauguration on the crypto market, others are bullish about the long-term potential of Trump’s pro-crypto policies.
FAQs
Q: What is the current price of Bitcoin?
A: The current price of Bitcoin is $96,500.
Q: What is the market performance of other cryptocurrencies?
A: Ripple’s XRP and dogecoin (DOGE) led altcoin majors, with 6%-7% advances.
Q: What is the impact of the CPI report on the crypto market?
A: The CPI report could inject another burst of volatility to markets and provide further clues for traders into the Federal Reserve’s policy trajectory for the year.
Q: What is the potential impact of Trump’s inauguration on the crypto market?
A: While some analysts are cautious about the potential impact of the inauguration on the crypto market, others are bullish about the long-term potential of Trump’s pro-crypto policies.
Q: What is the current state of the traditional markets?
A: The tech-heavy Nasdaq and the S&P 500 closed roughly flat.
