Bitcoin has reached new two-month highs, maintaining momentum despite the release of higher-than-expected US Producer Price Index (PPI) figures. The cryptocurrency climbed to approximately $97,000 as markets responded to inflation data that points to continued economic tightening, diverging from broader stock market movements. Traders and investors are closely watching key support levels, particularly the $93,500 mark, which could set the stage for a bullish recovery reminiscent of previous upward runs.
Key Takeaways
- •Bitcoin rises to an eight-week high despite increased US PPI inflation figures for November.
- •The US Supreme Court has refrained from issuing a ruling on trade tariffs, adding an element of market uncertainty.
- •Maintaining a weekly close above $93,500 is crucial for Bitcoin to sustain its bullish trajectory.
- •Analysts suggest that current price action mirrors past rebounds, with potential for further gains if key levels hold.
Market Reaction to Inflation Data and Policy Outlook
On the trading day, Bitcoin rebounded strongly against a backdrop of higher-than-anticipated inflation data from the Bureau of Labor Statistics. The PPI for November was reported at 3%, exceeding expectations of 2.7%. The core PPI remained unchanged, but the overall inflationary pressure suggests the Federal Reserve may hold off on cutting interest rates at its upcoming January meeting. This prospect has fostered optimism among crypto traders, who see Bitcoin as a hedge amid tightening monetary policy.
Despite rising inflation, market participants expect the Federal Reserve to pause rate hikes, with the CME FedWatch Tool indicating a high probability of unchanged interest rates in the near term. This expectation has bolstered Bitcoin’s price rally, which has largely ignored the inflationary pressures.
Earlier discussions centered on the Supreme Court’s deliberation over US trade tariffs, which, as of the latest update, remains undecided. The absence of a ruling introduces some uncertainty, but analysts emphasize that the technical outlook remains bullish. The focus is now on the weekly close, with traders emphasizing the importance of closing above the $93,500 threshold to confirm a continued upward trend.
According to market analyst Rekt Capital, sustaining above this level could mirror past rebounds seen in 2024 and 2025, setting the stage for further gains. If Bitcoin manages to hold this support level into the new week, it might retest previous highs, paving the way for a potential rally reminiscent of the post-tariff news surge last year. Historically, dips below $75,000 during tariff-related news preceded substantial bullish runs, highlighting the significance of key support zones in Bitcoin’s ongoing recovery.