Core CPI falls short of expectations, driving BTC rebound, market opportunities in the 3-year bull-bear cycle

The cryptocurrency market’s recent decoupling from traditional stock market performance has once again attracted attention. Amid a general correction in the US stock market, BTC has regained the $90,000 level, and ETH has also risen above $3,000. This rebound is not simply a technical correction from oversold conditions but stems from positive signals in US economic data—specifically, core CPI growth below market expectations—prompting traders to reassess the Federal Reserve’s future policy stance.

Economic Data Turnaround Drives Crypto Price Rebound

When the US core CPI data was released below expectations, the market responded immediately. This data suggests that inflationary pressures may not be as strong as anticipated, leading to a reevaluation of the Fed’s interest rate decisions. Originally, the market expected rates to remain unchanged in January, but the shift in inflation data has given policymakers more flexibility. Under this changed expectation, crypto assets, which have been hindered by long-term interest rate environments, have regained buying support.

BTC quickly rebounded from last week’s lows, with the straightforward logic being: loose monetary policy expectations support risk asset valuations. In comparison, this rebound is similar to the rally at the beginning of last week—both driven by expectations of an improved policy environment. Looking at the three-year bull-bear cycle, similar economic data turning points often become key market inflection points; past corrections around $70,000 have also been effectively repaired following such data surprises.

The Divergence Logic Between BTC and US Stocks

On the surface, the rise of BTC contrasted with the decline of US stocks, but this is not a contradiction; rather, it reflects differences in risk appetite among market participants. The technical correction in US stocks after consecutive new highs is a normal profit-taking process, and this presents an optimal buying opportunity for the crypto market. When traditional assets face correction pressures, some funds begin seeking alternative allocations, benefiting crypto assets.

Geopolitical risks further reinforce this divergence. Recently, Trump announced support for Iranian opposition protesters, increasing concerns about escalating conflicts. The crypto market’s response to geopolitical risks often leads traditional markets by one step, which explains why BTC had already experienced a correction before the US stock market plunged. Now, with the positive core CPI news reversing some pessimistic expectations, the crypto market has also rallied accordingly.

Structural Opportunities in the 3-Year Bull-Bear Cycle

Looking back at BTC’s performance over the past three years—from the lows in the tens of thousands of dollars to the peak of around $70,000–$80,000, and now approaching $90,000—each phase has been deeply influenced by macro policy environments. The current rebound somewhat replicates previous patterns: economic data improvement → policy expectation shift → risk assets rebound.

For long-term investors, such policy-driven volatility often breeds structural opportunities. From a three-year perspective, when key indicators like core CPI turn at a certain point, it usually signals a shift in market sentiment.

Recent High-Impact Data and Risk Factors

Tonight, the US will release PPI (Producer Price Index) data, and several Federal Reserve officials will also make speeches. Whether these data and statements can sustain the CPI surprise effect will directly influence subsequent market trends. If PPI also comes in below expectations, the expectation of easing will be further solidified, providing stronger support for continued crypto rebounds.

However, geopolitical tensions cannot be ignored. If armed intervention by the US or Israel is confirmed, even a recovering crypto market may face a correction. Nonetheless, historical experience shows that once geopolitical tensions subside, markets often present rebound opportunities. Therefore, the coming days are both a risk exposure period and a potential buildup phase for future gains.