Bitcoin Hits Near Two‑Month High as U.S. Inflation Data Steadies Markets
Bitcoin extended gains on Tuesday, climbing to its strongest level in about two months as investors digested fresh U.S. inflation data and the start of U.S. corporate earnings.
The world’s largest cryptocurrency was up roughly 4.5% on the day, reaching $95,800, its best performance since mid‑November. The rally also triggered an estimated $587 million in liquidations of short crypto positions, including about $292 million tied to Bitcoin.
CPI Data Reinforces Market Sentiment
Investors parsed December’s U.S. Consumer Price Index (CPI) report, which showed inflation holding steady at a 2.7% annual pace, in line with forecasts. Core inflation, excluding food and energy, also rose moderately. These inflation figures reinforced expectations that the Federal Reserve will hold interest rates steady in the near term, while keeping open the possibility of rate cuts later in 2026.
The inflation outcome — steady but still above the Fed’s 2% target — provided a backdrop of subdued equity volatility and modest moves in the U.S. dollar and Treasury yields.
Macro Events and Crypto Catalysts
Market observers have pointed to a series of recent global events that may be influencing Bitcoin’s resurgence. Analysts note that geopolitical and economic developments — including currency instability abroad and political headlines in the U.S. — have reminded some investors of Bitcoin’s role as a non‑sovereign asset.
“Over the past week and a half, we’ve witnessed several global events that remind investors why Bitcoin was created in the first place,” Ryan Rasmussen, head of research at Bitwise, told Decrypt. He cited examples such as the collapse of certain fiat currencies and regulatory actions as “catalysts” for renewed interest in digital assets.
Traditional Markets Mixed as Bitcoin Strengthens
Traditional markets offered a mixed picture on Tuesday. Financial stocks pulled U.S. indexes lower after some major banks reported weaker‑than‑expected earnings, even as benchmarks like the S&P 500 and Nasdaq stayed near recent highs. Meanwhile, the Dow Jones Industrial Average lagged amid bank earnings pressures.
Investors also reacted to the CPI data, which markets interpreted as validating a Fed policy pause while leaving room for future rate adjustments.
Liquidity, Monetary Policy & Crypto Sentiment
Crypto traders remain sensitive to shifts in expectations around liquidity and monetary policy — themes that have buoyed risk assets in recent months.
“Bitcoin’s price appears closely tied to expectations around global liquidity,” Abra founder and CEO Bill Barhydt told Decrypt. “Markets anticipate a sharp expansion in the money supply this year, driven largely by increased government bond purchases, while retail stimulus around the midterm elections could provide an additional boost.”
This uptick in Bitcoin comes after a period of consolidation, with market participants positioning around macro cues and a relatively improving sentiment toward digital assets compared with late 2025.
