Today's Crypto Market Daily | BTC rebounds above $90,000, inflation data drives market turnaround

Yesterday, the cryptocurrency market showed an independent trend. While the US stock market generally retreated, Bitcoin(BTC) rebounded strongly to the $90,160 level, rising 1.99% within 24 hours. Ethereum(ETH) broke above the $3,020 mark, with a 24-hour increase of 2.61%. This rebound resonated with the upward momentum at the beginning of last week, and the main catalyst driving the market shift came from the US release of core CPI figures below market expectations.

Independent Market Emerges, Digital Assets Lead the Rebound

When inflation data is below expectations, the market begins to reassess the Federal Reserve’s policy path. Investors anticipate that inflationary pressures may be lower than previously forecasted, which will influence the Fed’s judgment on future interest rate policies and shake market consensus on maintaining rates in January. Driven by this shift in expectations, after a week of downturn, the crypto market has seen a clear opportunity for recovery, reflecting a reassessment of inflation prospects.

Behind the US Stock Adjustment: Inflation Expectations and Geopolitical Risks

Interestingly, why did the US stock market also decline? Observing the past week’s trend reveals that during the ongoing weakness in the crypto market, US stock indices hit new highs for several consecutive days, indicating that market gains had become quite substantial. In summary, after significant gains, a correction is inevitable. This logic also applies to the crypto market: after a deep decline, a rebound occurs.

If we look for the direct cause of the US stock decline on the surface, it closely coincides with the background of the previous crypto downturn, which is the escalation of tensions involving Iran. Yesterday, the US government announced support for protests against Iran, leading the market to expect a possible escalation of geopolitical conflict. The crypto market responded more quickly and with greater sensitivity.

Escalation of Iran Tensions, Market Caution Spreads

Geopolitical risk is becoming a key variable affecting both markets. If the US or Israel confirms military action against Iran, risk assets including cryptocurrencies are likely to be impacted, potentially triggering a new round of correction. However, based on historical experience, once the contours of local conflicts become clearer, markets often rebound and recover, as investors gradually digest the risks.

Focus for Follow-up: PPI Data and Federal Reserve Statements

Today, several important events are still upcoming. The US will release another set of producer price index (PPI) data related to inflation, and multiple Fed officials will make comments, which could cause further market volatility. However, before the Iran situation clarifies, market focus remains on geopolitical developments.

This period may be an opportune window to capture rebounds. If the geopolitical situation does not escalate further, the crypto market could see a sustained rally driven by policy expectations and risk sentiment. Investors should closely monitor the PPI data, the latest Fed stance, and updates on Iran to seize upcoming market opportunities.