Bitcoin surged past the $90,000 mark after the latest U.S. consumer‑price‑index (CPI) data showed a modest drop in inflation. The rally was short‑lived, however, as the market remains in a state of extreme fear.

What Happened

On Friday, Bitcoin briefly crossed $90,000, the highest level since early 2024, following the release of the November CPI report. The data indicated that headline inflation had slowed to 3.4% from 3.6% in October, a sign that the U.S. economy may be cooling.

Why It Matters for Bitcoin

While a softer CPI can reduce pressure on the Federal Reserve to raise rates, it also fuels speculation that Bitcoin could benefit from a weaker dollar. Yet the move was fleeting, suggesting the market still lacks the fundamentals for a sustained rally. The Fear & Greed Index sits at 16, reflecting extreme fear among investors.

U.S. Angle

In the United States, Bitcoin’s trajectory is closely tied to several factors:

  • Federal Reserve policy: The Fed has maintained a high‑rate stance, and any shift could influence risk appetite.
  • SEC scrutiny: The U.S. regulator has not yet approved a spot Bitcoin ETF, keeping institutional demand muted.
  • Dollar strength: A robust U.S. dollar can dampen Bitcoin’s appeal as a hedge.
  • Inflation data: Continued CPI easing could lift sentiment, but the market remains cautious.

What to Watch Next

  • Fed’s upcoming policy meeting and any rate change.
  • Next CPI release and its impact on inflation expectations.
  • SEC rulings on Bitcoin ETF proposals.
  • Bitcoin network activity and on‑chain metrics.
  • Global macro events that could shift risk sentiment.

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Source

Cointelegraph