Core CPI released below expectations, BTC regains upward momentum and rebounds to the $90K level

In recent days, the cryptocurrency market has shown a completely different trend from the traditional stock market. Against the backdrop of the US stock market generally under pressure, BTC successfully rebounded to $90.23K, and ETH also regained above the $3K level. The core driver of this reversal comes from the US core CPI data being lower than market expectations. This data release directly impacted market perceptions of inflation trends, sparked expectations for future Federal Reserve interest rate adjustments, and thus brought noticeable gains to the crypto market after a sluggish week.

Softening Inflation Data, Fed Decision Pressure Emerges

If the core CPI results are somewhat lower than expected, it indicates that inflationary pressures are milder than previously assumed by the market. This signal directly influences the Fed’s judgment on the interest rate path—if inflation growth slows, the previously expected unchanged interest rate policy in January may be subject to change based on new data. The crypto market is extremely sensitive to such policy shift signals; when market expectations of easing policies rise, risk assets often see buying support.

In other words, the lower-than-expected core CPI broke the recent pessimistic sentiment in the crypto market, prompting investors to reassess the attractiveness of high-risk assets. This is precisely why we saw BTC rebound rapidly in a short period—after digesting the inflation data, the market quickly adjusted its judgment on the Fed’s easing space.

Independent Trends in Crypto Assets Emerge, Why Diverge from US Stocks?

The seemingly contradictory phenomenon is: while crypto assets are rising, the US stock market is falling. The underlying logic is actually not complicated. Reviewing the recent week’s market performance reveals that as the crypto market continues to adjust, US stock indices have repeatedly hit new highs over several days. This essentially reflects a technical correction demand after large gains. Whether in stocks or crypto, the market law of “overbought leads to correction, oversold leads to rebound” still applies.

However, if we look for the deeper reason behind the US stock decline, it points directly to the culprit of the previous crypto market downturn—geopolitical tensions. Recently, Trump announced support for protests by Iranian opposition groups, leading the market to start trading war risk expectations. Interestingly, crypto assets tend to react faster to such black swan events than traditional financial markets, so cryptocurrencies initially fell first, followed by pressure on US stocks.

Ongoing Risks and Rebound Opportunities Coexist

It is worth noting that today the US will release another set of PPI data closely related to inflation, and several Fed officials will make policy statements. These events are expected to bring volatility to the market, but currently, the focus remains on the escalation of tensions in Iran. If the US or Israel confirms military action against Iran, the crypto market will likely see adjustments in the short term. However, once geopolitical tensions clarify, markets often rebound strongly.

Therefore, this moment is worth close observation—full of risks but also containing rebound opportunities. Investors should pay attention to subsequent data following the core CPI release, Fed policy statements, and the actual development of geopolitical situations to find suitable trading opportunities amid market volatility.