Crypto Markets Reverse After Softer U.S. Inflation Data
Crypto markets initially surged Thursday following weaker-than-expected U.S. inflation numbers, only to reverse sharply within hours. Bitcoin (BTC) rose to $89,300 before falling to $85,500, trading around $86,000 at press time—down 0.8% over 24 hours. The Nasdaq also gave up early gains, dropping roughly 2% from session highs but staying up 1.7% overall.
November’s Consumer Price Index showed headline inflation cooling to 2.7% from October’s 3%, sparking speculation about a potential Fed rate cut in January, a development that typically supports risk assets like crypto.
Skeptics, however, raised concerns over the data’s accuracy. Economist Omair Sharif noted the BLS zeroed out rent and owner’s equivalent rent (OER) for October, which could depress year-over-year CPI readings through April. WSJ reporter Nick Timiraos called the approach “totally inexcusable.”
Market expectations reflect this caution, with the probability of a January rate cut remaining around 24%.
Bitcoin Rangebound, Ether Traders Hedge
Options activity shows diverging sentiment between Bitcoin and ether (ETH $2,981.53). Bitcoin traders are selling downside protection below $85,000 while limiting upside above $100,000, signaling confidence in near-term support but low expectations for a breakout, according to Wintermute’s OTC desk.
Ether options indicate more hedging behavior. Support appears around $2,700–$2,800, while upside calls above $3,100 are being sold aggressively, suggesting traders are focused on protection rather than betting on strong gains.
