Bitcoin is currently trading at $97,200, recovering from a dip to $90,000 earlier this week. Traders are advised to be cautious as upcoming US Consumer Price Index data could introduce volatility to the Market. A report suggests that if Donald Trump implements expansionary economic policies and extends tax cuts, it could benefit riskier assets like Bitcoin. Recent US inflation reports show softer-than-expected data, which may influence the Federal Reserve’s decisions on interest rates, potentially boosting demand for cryptocurrencies. Bitcoin showed signs of bullish momentum, and if it closes above $100,000, it may rally toward its all-time high of $108,353. However, a drop below $90,000 could indicate further declines.
Bitcoin Price Updates: Recovery Above $97,000 Amid Market Volatility
Bitcoin is making headlines today as its price rises above $97,000. This comes after the cryptocurrency retested the key psychological level of $90,000 earlier this week. Traders are advised to remain cautious, especially with upcoming US Consumer Price Index (CPI) data set to be released, which could lead to significant Market fluctuations.
The recent K33 report highlights that former President Donald Trump may implement expansionary policies, including extending the 2017 tax cuts and providing additional tax relief for working-class Americans. These potential moves could positively impact risk assets, including Bitcoin.
Bitcoin Shows Recovery Above $97,200
As of Wednesday, Bitcoin is climbing back, trading at approximately $97,200, recovering from its low of $89,256 earlier in the week. Analysts note that softer-than-expected inflation data from the US has resulted in a pause in rising Treasury bond yields, which in turn has increased investor interest in riskier assets like Bitcoin.
Specifically, the Producer Price Index (PPI), which tracks wholesale inflation, rose just 0.2% in December, falling short of expectations and indicating potential easing in inflation pressures that could influence the Federal Reserve’s decisions on interest rates.
Positive Outlook for Bitcoin
Senior analysts are monitoring the core CPI figures closely, especially as a consistent reduction in inflation could encourage the Federal Reserve to cut interest rates, increasing demand for risky assets such as Bitcoin. If Bitcoin maintains its upward momentum and breaks the $100,000 mark, it might retest the December all-time high of $108,353.
Furthermore, in recent conversations, K33’s research has pointed to a strong correlation between Bitcoin and the Nasdaq composite, indicating a trend investors should keep an eye on.
In conclusion, Bitcoin’s recovery trend signifies potential bullish momentum in the Market, but close attention to economic data and policy changes is crucial for strategic trading.
Tags: Bitcoin price, cryptocurrency news, US CPI data, Market volatility, Bitcoin recovery
What is Bitcoin volatility?
Bitcoin volatility refers to the rapid and significant price changes of Bitcoin. This can happen due to various factors, including Market news, trader sentiment, or major economic events.
Why might Bitcoin be more volatile around US CPI data?
Bitcoin could see more price swings before the US Consumer Price Index (CPI) data is released. Traders often react to such economic news, which can affect their buying and selling decisions.
What is US CPI data?
US CPI data measures how prices for goods and services change over time. It helps indicate inflation rates and is important for understanding the overall economy.
How can I prepare for potential Bitcoin volatility?
To prepare for volatility, consider setting clear investment goals, staying informed about Market news, and being ready for both price increases and decreases. It’s also helpful to only invest what you can afford to lose.
Should I buy or sell Bitcoin before the CPI data is released?
Deciding to buy or sell depends on your investment strategy and risk tolerance. If you are unsure, it might be wise to hold off until after the data is released, as reactions to the CPI can be unpredictable.