Bitcoin Rallies Above $104K Amid Positive Inflation Data and Market Sentiment
Bitcoin (BTC) surged above $104,000 on Tuesday, buoyed by favorable inflation data, President Trump’s optimistic remarks on financial markets, and Coinbase’s inclusion in the S&P 500 index, which all played a role in the rally.
April’s Consumer Price Index (CPI) came in lower than expected, easing concerns about inflation and potentially relieving some pressure on the Federal Reserve, which has been grappling with inflation concerns related to tariffs. Federal Reserve Chair Jerome Powell’s upcoming speech on Thursday could provide more insights into future policy actions.
Adding to the positive sentiment, former President Donald Trump spoke at the Saudi-U.S. Investment Forum in Riyadh, stating that financial markets “could go a lot higher,” fueling further optimism.
Bitcoin briefly approached $105,000 before retreating slightly, trading 2.4% higher over the past 24 hours at around $104,400 at the time of writing. Most altcoins in the CoinDesk 20 Index outperformed, with Ethereum’s Ether (ETH) rising more than 9% to $2,700. Restaking protocol Eigenlayer’s governance token and decentralized finance (DeFi) protocol EtherFi’s native token (ETHFI) saw daily gains of 20-30%.
The stock market also extended its recent gains, with the Nasdaq and S&P 500 increasing by 1.6% and 0.75%, respectively, by the session’s close. Nasdaq-listed Coinbase (COIN) saw a remarkable 24% surge as the stock will benefit from its inclusion in the S&P 500 index, with Jefferies forecasting a potential $16 billion in buying pressure for the shares.
Market Sentiment and Institutional Tailwinds
Joel Kruger, market strategist at LMAX Group, stated that the crypto market is still absorbing last week’s gains, but there is further momentum. “Although the market is taking a breather, the overall sentiment and the recent headlines suggest this rally has more room to grow,” Kruger said.
He highlighted the rebound in global risk appetite and the increasing institutional support for cryptocurrencies. “One key development is the mainstream adoption of cryptocurrency, as evidenced by Coinbase’s entry into the S&P 500, marking a milestone for the industry,” Kruger added.
Kruger also noted that regulatory sentiment is improving, with SEC Chair Paul Atkins emphasizing the U.S. as a hub for cryptocurrency innovation. If followed by clear policy actions, this could spur more institutional interest in the space.
Paul Howard, senior director at Wincent, echoed this outlook, suggesting that while altcoins are benefiting from the broader rally, institutional investors will likely become more selective. “This evolving landscape is setting the stage for greater institutional involvement,” Howard said in a Telegram message. “The more resilient altcoin projects could see greater interest, while weaker ones may gradually phase out.”
Bitcoin’s Path to a New Record
Bitcoin is now less than 5% away from its January all-time high, with analysts from Bitfinex noting that neutral funding rates and stable trading volumes suggest the market is not overheating. However, Bitcoin is facing resistance in the $104,000-$106,000 range, which could lead to short-term consolidation. The key support level is around $98,000.
“Given Bitcoin’s sharp recent rise, we anticipate a period of consolidation, which means the all-time high could be delayed until June as supply and demand stabilize above $100,000,” Bitfinex analysts said.
Looking further ahead, Bitfinex analysts remain highly optimistic, setting a target range of $150,000-$180,000 for Bitcoin in 2025-2026.
“Bitcoin’s long-term prospects have never been stronger,” they concluded. “With increasing adoption by sovereign and institutional players, the global expansion of ETFs, and positive developments in U.S. crypto policy, Bitcoin is evolving into a global macro reserve asset.”
