US CPI data decline drives BTC to restart upward trend

The cryptocurrency market has recently shown an independent trend. Despite the general pressure in the US stock market, Bitcoin and Ethereum have rebounded against the trend. The driving force behind this is the better-than-expected core CPI data released by the United States. The market’s reassessment of inflation pressures is reshaping expectations for the future policy direction of the Federal Reserve.

US CPI Decline Changes Market Inflation Judgment

The latest core CPI data released by the US was below market expectations, directly impacting the cryptocurrency market. When inflation expectations are revised downward, the market begins to reassess the Federal Reserve’s interest rate decision path. The market initially expected interest rates to remain unchanged in January, but the weak CPI data may shake this consensus.

As inflation pressures ease, market participants are beginning to anticipate that the Federal Reserve might have room to adjust its policies. This shift in expectations is the main reason why the crypto market, after a week of correction, has once again experienced a significant rally. Bitcoin has regained the $90,000 level, and Ethereum has also recovered its losses, demonstrating a new round of market pricing on economic prospects.

The Logic Behind US Stock Pullback and Independent Crypto Market Trends

Interestingly, amid the release of economic data in the US, the US stock market has experienced a pullback. This reflects different concerns among market participants. Observing the trend over the past week, during the ongoing correction in cryptocurrencies, US stock indices have continued to reach new highs, with gains already substantial. Moderate pullbacks and consolidations have become a natural market demand.

Meanwhile, geopolitical risks have resurfaced. Recently, Trump announced support for Iranian opposition protesters, leading to market expectations of increased regional conflict. The US stock market’s reaction to this news has been relatively slow, while the cryptocurrency market has already priced in this risk in advance. Therefore, the correction in the crypto market has actually led the US stock market trend.

Future Focus on PPI and Federal Reserve Statements

The upcoming market focus will be on the release of several important data and information. The US Producer Price Index (PPI) will further refine the market’s understanding of inflation trends, and statements from multiple Federal Reserve officials may also influence market expectations.

Given the ongoing uncertainty surrounding the Iran situation, if the US or its allies confirm military action, the crypto market is likely to face further adjustments. However, from a longer-term perspective, once geopolitical tensions clarify, the market may reassess and rebound. This critical period could be an opportune window for investors to closely monitor market movements and seize potential rebound opportunities.