The cryptocurrency market saw a significant rebound on Thursday, with global crypto assets climbing by 4%, driven by positive US CPI (Consumer Price Index) data signaling a potential shift toward a less aggressive monetary policy. The rally was particularly strong for altcoins, while Bitcoin surged back above the $100,000 mark. This surge follows a challenging Wednesday when leveraged traders faced heavy losses amounting to $1.5 billion after a bearish start to the week.
The market’s impressive gains were fueled by the release of US CPI data showing a 0.3% rise in inflation last month, marking the highest increase since April. This followed four consecutive months of 0.2% increases. The data sparked optimism among investors, with many speculating that the Federal Reserve might lower interest rates by 25 basis points in its next meeting. This expectation drove stock futures higher and triggered a modest rally in Treasury yields. Lower interest rates generally reduce borrowing costs, improve market liquidity, and encourage the flow of funds into higher-risk assets such as cryptocurrencies. As a result, many investors are shifting their focus from safer assets like bonds to the volatile crypto market in search of higher returns.
Market Snapshot Today
Boosted by positive U.S. CPI news, the Crypto market saw a strong rebound!
BTC & ETH gained around +5%
DeFi & AI sectors surged +13%, leading the pack!
âš¡ Sui hit a new ATH, driving Layer1 blockchains up +8%
GameFi & Depin also climbed… pic.twitter.com/DCIFWBLMQ1— Bidacoin (@BidacoinEx) December 12, 2024
Among the leading cryptocurrencies, Aave, Sui, and Chainlink saw notable gains. Bitcoin rose by 3.5%, while Ethereum (ETH) increased by 6.8%. Bitcoin’s rebound is a significant turnaround, particularly after dipping below $96,000 earlier in the week. The drop was attributed to investors taking profits at peak levels, which added downward pressure to the market. However, when Bitcoin’s price fell below $95,000, buyers regained control, triggering a recovery.
Alex Kuptsikevich, Chief Market Analyst at FxPro, explained that the decline below $95,000 acted as a key support level for Bitcoin. “Long-term holders were quick to re-enter the market at this level, while corporate interest in buying Bitcoin for balance sheets is also growing,” he said. Kuptsikevich pointed out that Bitcoin is facing psychological resistance similar to its struggles in 2020 when it hesitated to break through the $20,000 level. “We could see Bitcoin reach $120,000 to $140,000 in the next couple of months, before the next major correction,” he predicted.
The positive momentum in Bitcoin is also lifting other cryptocurrencies, particularly Ethereum and XRP. According to Avinash Shekhar, Co-Founder and CEO of Pi42, the recovery in Bitcoin is signaling bullish trends across the broader market. “Bitcoin’s rebound suggests that we could see BTC target $112,000, with potential to reach $125,000. Short-term resistance around $104,088 might create some volatility, but the overall outlook remains positive,” Shekhar said.
He also highlighted that Ethereum, which is eyeing a breakout above $4,000, could see further upside with a target of $4,500, while XRP, currently finding support above $2.30, could aim for $3.50. Meanwhile, Dogecoin, which recently rebounded from oversold levels, is showing renewed demand, further fueling optimism in the market. This suggests that the bullish sentiment could spread to a broader range of altcoins, keeping investor interest high as they await clearer signs of macroeconomic stability.
