Bitcoin hit a new weekly high, breaking the $98,500 mark, after the U.S. Labor Department released the Consumer Price Index (CPI) data for December. Despite concerns over inflation and the Federal Reserve’s decision to leave interest rates unchanged this year, Bitcoin and other cryptocurrencies saw a strong upward movement.
December inflation report matches market expectations
The December CPI showed a 2.9% increase, exactly as economists had predicted, while the Core CPI, which excludes more volatile items like food and energy, came in slightly under expectations at 3.2%. This data revealed that inflation was still a concern, but not as severe as some had feared, which helped boost investor confidence.
Bitcoin reacts strongly to inflation data
Before the CPI data was released, Bitcoin’s price was hovering just below $97,000. However, the news caused a sharp rally, and the cryptocurrency quickly jumped to over $98,500, its highest value in over a week. This sudden increase represents a nearly $10,000 gain from Bitcoin’s recent low of $89,200 on Monday, signaling a strong response from traders.
Investors anticipate further inflation impacts
Bitcoin’s strong response to the inflation data suggests that markets had expected inflation concerns to persist, but were hoping for stability or signs of easing. The Federal Reserve has indicated that interest rates will remain unchanged for the year, which has kept some riskier assets like cryptocurrencies on investors’ radar. With Bitcoin’s price jumping ahead of any additional data releases, it’s clear that many investors are positioning themselves for a favourable outcome in the coming months.
