US Core CPI below expectations, cryptocurrency market rebounds accordingly

The recently released US core CPI data performed below market expectations, sending a positive signal to the cryptocurrency market. Against the backdrop of global economic uncertainty, the soft inflation data directly triggered investors’ expectations of monetary policy adjustments, thereby driving a rapid rebound in mainstream assets such as BTC and ETH.

Weak Inflation Data Drives Market Repricing

The US core CPI data released was below expectations, directly impacting market perceptions of inflation. While the market initially anticipated continued inflationary pressure, this data conveyed the opposite signal. The cryptocurrency market responded quickly; BTC surged to nearly $95,000 in the short term, and ETH also regained levels around $3,300. This rapid price reaction reflects investors’ positive adjustment of inflation expectations.

According to the latest data, BTC is currently quoted at approximately $89,880, up 1.71% over the past 24 hours; ETH is around $3,010, with a 24-hour increase of 2.14%. Although the absolute prices have retreated from previous highs, upward momentum remains evident.

Federal Reserve Policy Expectations Shift, Crypto Leads US Stocks Adjustment

Interestingly, while US stock indices generally weakened, cryptocurrencies demonstrated an independent trend. The reason behind this is that the market has begun to reassess the Federal Reserve’s policy direction. The lower-than-expected US core CPI data may shake market expectations of the Fed maintaining interest rates unchanged in January, leaving room for subsequent policy adjustments.

Compared to US stocks, which need to digest the adjustment pressure from excessive gains, the crypto market reacts more quickly to changes in economic data. This is precisely why, after a sluggish week, the crypto market was able to lead with noticeable gains—market participants swiftly captured the potential policy benefits of easing inflation.

Iran Situation Influences Global Risk Sentiment

However, it should be noted that the recent pullback in US stocks was not entirely driven by economic data. Geopolitical factors also played a role. Recently, US leaders announced plans to assist Iranian opposition protesters, raising concerns about potential conflicts. This uncertainty has a more direct impact on traditional financial markets. Although the crypto market also responded, it demonstrated stronger resilience against declines.

Upcoming PPI Data and Policy Statements to Watch

Today, the US will release another set of PPI data directly related to inflation, and several Federal Reserve officials will also make statements. The combination of these signals is expected to cause some short-term market volatility. If the Iran situation escalates further, and the US or Israel confirms military action, even the crypto market may face some correction pressure.

However, based on historical experience, once geopolitical events become clearer, markets often rebound. Therefore, the coming days could be a good opportunity for investors to position themselves, especially for those optimistic about long-term prospects. The direction of US economic policy and international developments will continue to be key factors influencing short-term crypto market volatility.