Bitcoin Gains Momentum After CPI Report, Analysts Eye Continued Rally

Bitcoin (BTC) prices have risen approximately 3% following the release of the U.S. Consumer Price Index (CPI) report, sparking optimism about potential Federal Reserve rate cuts. Market experts are closely monitoring whether the cryptocurrency’s rally will continue.

According to CoinTelegraph on January 16, the CPI report, released on January 15, showed core inflation for December falling below expectations. Bitcoin’s price climbed from around $96,000 to nearly $100,000 in response. Other assets, including stocks and gold, also posted gains during the same period.

Rate Cut Expectations Fuel Optimism

Data from CME’s FedWatch tool indicates a 30% probability that the Federal Reserve will cut rates in March, a development that is typically favorable for cryptocurrencies. Morningstar Research Director Bryan Armour stated, “Bitcoin trades like a store-of-value asset, similar to gold. Lower inflation supports Bitcoin’s price trajectory.”

CME futures data suggests a 2–3% rise in Bitcoin contracts expiring between February and April, indicating a positive mid-term outlook. However, some analysts caution that sustained growth depends on whether President-elect Donald Trump implements pro-crypto policies promptly after his January 20 inauguration.

Market Sentiment and Volatility

John Glover, Chief Investment Officer at crypto lending firm Ledn, commented, “The market is interpreting rate cut prospects as a positive signal for digital assets. However, until Trump enacts meaningful crypto regulatory reforms, price volatility is likely to persist.”

During his campaign, Trump pledged to appoint pro-crypto officials to key regulatory agencies and establish the U.S. as a “hub for cryptocurrency.”

Market Rebound in Focus

Bitcoin experienced a 10% decline from mid-December to January 14, dropping from $106,000 to $96,000, primarily due to macroeconomic headwinds and inflation concerns.

Crypto analytics firm Glassnode noted in its January 15 newsletter, “Overheated market elements have been largely eliminated, and demand remains relatively robust.” The report added that Bitcoin’s spot price is holding above key support levels, maintaining a bullish market structure for now.

With inflation easing and the potential for regulatory changes on the horizon, market participants are closely watching Bitcoin’s ability to sustain its upward momentum.