Cryptocurrency prices recovered from Monday’s decline and bitcoin (BTC) rose as high as $97,300 on Tuesday as traders watched the latest batch of US inflation data, with more information coming tomorrow.
The cryptocurrency’s further drop below $90,000 yesterday was quickly offset by reports that Donald Trump is preparing day one executive orders benefiting the crypto industry. The advance continued today, supported by weaker-than-expected December US Producer Price Index (PPI) readings.
BTC recently changed hands at $96,500, up 3% in the last 24 hours, while the broad-market CoinDesk 20 benchmark index outperformed with a 5% gain. XRP and Ripple’s dogecoin (DOGE) led the major altcoins with advances of 6% to 7%.
In traditional markets, the tech-heavy Nasdaq and S&P 500 closed virtually unchanged.
Zooming out, bitcoin is still consolidating sideways above $90,000, while rising bond yields and the US dollar have rocked markets around the world over the past few weeks. Market participants have already lowered their expectations for lower U.S. interest rates this year amid recent U.S. economic data releases.
Wednesday’s Consumer Price Index (CPI) report could inject another burst of volatility into markets and provide more clues to traders about the Federal Reserve’s policy path for the year.
Beyond that, Trump’s inauguration ceremony scheduled for January 20 could also move markets as anticipation builds for the incoming president’s pro-cryptocurrency actions.
K33 Research previously projected that the inauguration could be an opportunistic event to sell the news amid higher expectations, but the sell-off in stocks and digital assets earlier in the year caused the company to revise its view.
“While our monthly outlook favored inauguration selling, we would like to recast this strategy as selling BTC on inauguration is considerably less attractive unless the next six days offer a substantial resurgence in momentum,” the report said. “The S&P 500 closed its post-election gap yesterday and BTC hit 2-month lows.”
“The risk reduction would depend entirely on next week’s price action and would be short-lived as we maintain long-term bullish expectations on Trump’s impact on BTC,” the authors added.
