Isabella García
Bitcoin surged past the $100,000 threshold briefly, reflecting a 4% increase in the last 24 hours, according to PRIME’s Price Page. Ether followed suit, climbing above $3,400, while Solana surpassed the $200 mark, signaling a resurgence across the crypto market.
Matt Mena, Crypto Research Strategist at 21Shares, attributed Bitcoin’s rally to easing inflationary pressures, which have improved market sentiment and boosted risk asset performance.
“December’s CPI data removed a significant macroeconomic hurdle, allowing Bitcoin to break through the $100,000 mark just ahead of Donald Trump’s inauguration,” Mena said. “With headline CPI steady at 2.9% year-over-year and core CPI cooling to 3.2%, a dovish Federal Reserve pivot seems increasingly likely.”
The U.S. core CPI rate’s decline from November’s 3.3% marked its first decrease since July, fueling speculation about potential interest rate cuts in 2025. Although futures traders anticipate the Federal Reserve will delay rate reductions until mid-year, the likelihood of two cuts by year-end has increased significantly.
This changing monetary outlook has created favorable conditions for Bitcoin and other risk-sensitive investments.
Global Markets Build Optimism
As inflation cools, broader market performance has also improved. The S&P 500 is approaching critical resistance levels near 5,935.02, adding to investor confidence.
“With Trump’s inauguration on the horizon, the combination of easing inflation, pro-growth policy expectations, and technical breakouts in equities and crypto sets the stage for a sustained market rally,” Mena explained.
Jag Kooner, Head of Derivatives at Bitfinex, highlighted Bitcoin’s increasing correlation with traditional financial markets.
“Bitcoin’s correlation with the Nasdaq 100 has reached a two-year high, making it highly sensitive to CPI data,” Kooner said. “As we move into Q1, Bitcoin is becoming more intertwined with traditional finance, reacting more quickly to macroeconomic shifts than other risk assets.”
Perpetual Futures Funding Rates and Liquidations Surge
Bitcoin perpetual futures funding rates have risen sharply, signaling optimism among market participants. Data from Coinglass shows the open interest-weighted funding rate climbed to 0.0076% during the latest 8-hour cycle across major exchanges.
Short liquidations also spiked, with over $263 million liquidated in the past 24 hours. Of this, $169 million were short positions, reflecting strong upward price pressure. Bitcoin alone accounted for $63 million in liquidations, including $47 million in short positions.
As the Federal Reserve’s monetary stance evolves and Bitcoin continues its upward trajectory, the cryptocurrency market may experience sustained growth. With major milestones reached and global market optimism increasing, Bitcoin is positioned to redefine new highs in the coming months.
