Bitcoin Hits Two-Month High as CPI Steadies and Short Covering Accelerates
Bitcoin surged to a two-month high above $95,500, up about 4.5% in a day, fueled by the start of U.S. corporate earnings and new inflation data. The rally led to approximately $587 million in crypto short liquidations, including $292 million in Bitcoin. U.S. stock markets were mixed, with financial stocks dragging the Dow Jones lower after weak JPMorgan Chase earnings, though the S&P 500 and Nasdaq stayed near highs. December’s consumer price index showed a 2.7% annual inflation rate, matching forecasts; core inflation rose 2.6%. The report supports expectations that the Federal Reserve will keep rates steady for now, although markets see possible rate cuts in 2026. Asset volatility and movements in the dollar and Treasury yields remained modest. The steady-but-elevated inflation rate allows the Fed to remain cautious with policy changes. Market participants, especially in crypto, are responding to macroeconomic signals and expectations of increased liquidity, with potential further boosts from anticipated government bond purchases and election-year stimulus.
