Bitcoin (BTC) Price Bounces Back Above $96K as Traders Eye US Inflation Data

Bitcoin price rose to a new all-time high of $97,300 on Tuesday, as traders awaited the latest batch of U.S. inflation data.

The world’s largest cryptocurrency briefly dipped below the $90,000 level on Monday, following a sell-off in stock and crypto markets towards the end of last week. But the bid quickly returned on reports that President-elect Donald Trump is preparing first-day executive orders that will benefit the crypto industry.

The advance continued on Tuesday, gathering pace after data showed the U.S. Producer Price Index (PPI) increased less than expected in December.

BTC was last changing hands at $96,500, according to Bitstamp, up 3% over the past 24 hours and 122% year-to-date.

The CoinDesk 20-market benchmark index, which tracks the 20 largest cryptocurrencies by market capitalization, was up 5% on Tuesday.

Among altcoins, XRP and dogecoin (DOGE) led the major gainers with 6%-7% advances.

In traditional markets, the tech-heavy Nasdaq and the S&P 500 closed largely unchanged on Tuesday, while the Dow Jones Industrial Average dropped over 100 points. Among stock sectors, technology outperformed, while energy and materials led the decliners.

Zooming out, bitcoin is still consolidating sideways above the $90,000 level, even as soaring bond yields and the U.S. dollar shook markets across the globe over the past weeks.

Market participants have already scaled back expectations for lower interest rates in the U.S. this year, following several hot U.S. economic data releases, including employment and inflation figures, over the past few weeks.

Anticipation is now building for the Consumer Price Index (CPI) report, due Wednesday, which could inject another burst of volatility to markets and provide further clues for traders into the Federal Reserve's policy trajectory for the year.

Looking past that, Trump's inauguration ceremony on Jan. 20 could also move markets.

Anticipation is building for the incoming president's pro-crypto actions, following reports last week that members of Trump's transition team are meeting with crypto exchange executives and discussing ways the administration can support the digital asset industry.

K33 Research, in its latest report, noted that the inauguration could be an opportunistic sell-the-news event, given the market's already high expectations for Trump's pro-crypto policies.

But the report also highlighted that the sell-off in stocks and digital assets in the early part of the year, and the subsequent recovery, prompted the firm to revise its view.

"While our monthly outlook favored selling the inauguration, we’d like to rephrase this strategy as selling BTC at the inauguration is considerably less appealing unless the coming six days offer a substantial resurfacing of momentum," the report said, adding that the S&P 500 closed its post-election gap on Monday and BTC reached two-month lows.

"De-risking [out of bitcoin] would be entirely path-dependent on next week’s price action and short-lived in nature as we hold bullish long-term expectations for Trump’s impact on BTC," the authors added.