Why Is Crypto Going Up? Bitcoin and Ethereum Prices Surge After US CPI Report

Wednesday, 15/01/2025 | 14:23 GMT by Damian Chmiel
  • Bitcoin's price is up 2.6% on Wednesday as investors anticipate faster rate cuts in the US.
  • The entire cryptocurrency market followed BTC, and experts predict volatility will persist.
inflation
Higher US CPI translated to higher Bitcoin price

Bitcoin price approached the psychological barrier of $100,000 following December's inflation increase in the United States. Along with BTC, altcoins also rose as investors anticipate the Federal Reserve may be forced to cut rates sooner than planned13.

Why is Bitcoin Up? US CPI Inflation Rose 0.4% in December 2024

On Wednesday, January 15, 2025, the US Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) increased by 0.4% last month.

"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent on a seasonally adjusted basis in December, after rising 0.3 percent in November. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment," the BLS commented.

The higher monthly inflation reading caused the CME FedWatch tool to indicate a 30% probability of a rate cut at the March meeting. The cryptocurrency market, anticipating interest rate cuts, saw Bitcoin jump 1.4% to $98,500 immediately after the report, eventually reaching a local daily high of $99,400.

Why is Bitcoin going up? Source: CoinMarketCap.com
Why is Bitcoin going up? Source: CoinMarketCap.com

This price action validated yesterday's bullish doji candle (or pin bar) formation, which emerged when BTC briefly dipped below $90,000. If the trend continues, surpassing the $100,000 level should only be a matter of time. This would pave the way for Bitcoin to retest its all-time high above $108,000.

Paul Howard, Wincent
Paul Howard, Wincent

"Crypto remains a key indicator of risk assets, and with CPI and inflation figures exceeding expectations, this improvement is evident in current pricing,” Paul Howard, Senior Director at Wincent, commented for Finance Magnates. “As a leading liquidity provider in digital assets, we anticipate a highly volatile week ahead, particularly with the transition of administration in the US, which could result in +/-10% price swings for major assets like BTC, SOL, ETH, and XRP.”

Why Is Crypto Up Today? Ethereum and Other Altcoins Follow Bitcoin's Lead

Altcoins quickly followed Bitcoin's lead. Ethereum , the second-largest cryptocurrency by market capitalization, rose 3% in the past hour to $3,300, while XRP jumped 2.6% to $2.57.

The total cryptocurrency market capitalization increased by 5.6% to $3.33 trillion, with daily trading volume surging 25% to $154 billion according to CoinMarketCap data.

Bitcoin and altcoins are going up. Source: CoinMarketCap.com
Bitcoin and altcoins are going up. Source: CoinMarketCap.com

“Market pricing will likely respond to announcements made by the incoming President, suggesting that current valuations may not fully account for upcoming news,” added Howard. “Many of these expected announcements are likely to have long-term implications throughout the year, especially in areas such as regulatory clarity, adjustments to banking policies, and leadership in matters like a strategic bitcoin reserve.”

Bitcoin price approached the psychological barrier of $100,000 following December's inflation increase in the United States. Along with BTC, altcoins also rose as investors anticipate the Federal Reserve may be forced to cut rates sooner than planned13.

Why is Bitcoin Up? US CPI Inflation Rose 0.4% in December 2024

On Wednesday, January 15, 2025, the US Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) increased by 0.4% last month.

"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent on a seasonally adjusted basis in December, after rising 0.3 percent in November. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment," the BLS commented.

The higher monthly inflation reading caused the CME FedWatch tool to indicate a 30% probability of a rate cut at the March meeting. The cryptocurrency market, anticipating interest rate cuts, saw Bitcoin jump 1.4% to $98,500 immediately after the report, eventually reaching a local daily high of $99,400.

Why is Bitcoin going up? Source: CoinMarketCap.com
Why is Bitcoin going up? Source: CoinMarketCap.com

This price action validated yesterday's bullish doji candle (or pin bar) formation, which emerged when BTC briefly dipped below $90,000. If the trend continues, surpassing the $100,000 level should only be a matter of time. This would pave the way for Bitcoin to retest its all-time high above $108,000.

Paul Howard, Wincent
Paul Howard, Wincent

"Crypto remains a key indicator of risk assets, and with CPI and inflation figures exceeding expectations, this improvement is evident in current pricing,” Paul Howard, Senior Director at Wincent, commented for Finance Magnates. “As a leading liquidity provider in digital assets, we anticipate a highly volatile week ahead, particularly with the transition of administration in the US, which could result in +/-10% price swings for major assets like BTC, SOL, ETH, and XRP.”

Why Is Crypto Up Today? Ethereum and Other Altcoins Follow Bitcoin's Lead

Altcoins quickly followed Bitcoin's lead. Ethereum , the second-largest cryptocurrency by market capitalization, rose 3% in the past hour to $3,300, while XRP jumped 2.6% to $2.57.

The total cryptocurrency market capitalization increased by 5.6% to $3.33 trillion, with daily trading volume surging 25% to $154 billion according to CoinMarketCap data.

Bitcoin and altcoins are going up. Source: CoinMarketCap.com
Bitcoin and altcoins are going up. Source: CoinMarketCap.com

“Market pricing will likely respond to announcements made by the incoming President, suggesting that current valuations may not fully account for upcoming news,” added Howard. “Many of these expected announcements are likely to have long-term implications throughout the year, especially in areas such as regulatory clarity, adjustments to banking policies, and leadership in matters like a strategic bitcoin reserve.”

About the Author: Damian Chmiel
Damian Chmiel
  • 2145 Articles
  • 60 Followers
About the Author: Damian Chmiel
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
  • 2145 Articles
  • 60 Followers

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