Bitcoin surges above $97,000 in a remarkable turnaround, fueled by light inflation data and rising investor confidence.
On Tuesday, the stock market rose, following other risk assets, as traders processed a moderate inflation report.
On Tuesday, the flagship cryptocurrency's price increased by 4.5% to $97,044.35, as reported by Coin Metrics. This came after the cryptocurrency had fallen below the $90,000 support level at the start of the week. Meanwhile, the broader crypto market, as measured by the CoinDesk 20 index, experienced a 3.9% increase.
The mining stocks and experienced a growth of approximately 5%.
The Bureau of Labor Statistics reported cooler-than-expected inflation on Tuesday, with the producer price index increasing only 0.2% in December, lower than the 0.4% rise estimated by economists polled by Dow Jones.
The crypto market is experiencing a tug of war between investors' concerns about inflation under the incoming administration of Donald Trump and optimism over the president-elect's pro-crypto leadership, which could positively impact the industry this year. As a result, traders anticipate a more volatile January, which may continue throughout the quarter.
Last week, bitcoin dropped due to stronger-than-expected payroll numbers that led to a rise in bond yields, causing investors to sell off growth-oriented assets. Additionally, headlines about Trump's tariff plans boosted the dollar, which negatively impacts bitcoin.
Tom Lee of Fundstrat stated on CNBC's "Squawk Box" that bitcoin could experience a correction to $70,000 before achieving new records and ending the year between $200,000 and $250,000. Crypto traders are familiar with the steep declines in bitcoin during a bull market.
Bitcoin is currently experiencing a 10% decline from its record high on December 17, 2021. However, it has still managed to increase by 3% since the beginning of 2025.
Technology
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