Bitcoin rallies past $93,000 after inflation data increased chances of further rate cuts

Bitcoin climbed past $93,500 on Tuesday, gaining more than 2% in 24 hours, as investors responded to a mix of steady inflation data, political instability, and renewed interest in crypto as a macro hedge.

The move follows a brief dip earlier, with BTC rebounding from weekend support levels around $91,000. U.S. Consumer Price Index (CPI) data released earlier showed that December inflation held steady at 2.7% as expected, with the core CPI coming in lower than analyst consensus.

Altcoins followed BTC’s move, with ether ETH$1,952.27 rising 1.7% to $3,185 and BNB up over 1.5%. The broader market, measured via the CoinDesk 20 (CD20) index, is up 1.4%. Gold has continued to advance, breaching the $4,600 mark. The modest rally in crypto prices happened while the S&P 500 and Nasdaq indexes slipped roughly 0.2% lower through the session.

"This morning’s CPI report has provided the definitive anchor the market needed to clear the lingering data fog from late 2025," said Matt Mena, crypto strategist at digital asset investment firm 21Shares. "Core CPI coming in lower than expected reinforces the Fed’s soft landing narrative and increases chances of further cuts this year, even amid political noise around the DOJ’s investigation into Chair Powell."

Lower interest rates typically reduce the appeal of holding cash and boost demand for risk assets, a category that bitcoin and other cryptocurrencies fall under. On Polymarket, however, odds of the Fed cutting rates by 25 basis points this month are slim at 3.6%, while on Kalshi they stand at 5%.

Bitcoin to $100,000

21Shares' Mena said that bitcoin still needs to clear the $93,500-$95,000 resistance zone, which has capped prices for nearly two months.

With the CPI report out of the way, several key events could inject fresh volatility into the markets, Mena added.

The digital asset market structure legislation is advancing in the Senate, with the latest draft unveiled late Monday showing a compromise on stablecoin yields and some protection for decentralized finance (DeFi). If passed, the bill could provide a potential tailwind for crypto assets, offering a "seal of approval" for institutional capital, Mena noted.

Investors are also watching for a Supreme Court ruling on federal tariff authority expected on Wednesday, which could impact the dollar and risk assets, Mena added.

Political tensions are also in play. Growing friction between President Donald Trump and Federal Reserve Chair Jerome Powell, including a Department of Justice subpoena threatening a criminal indictment against the latter, has raised concerns about the Fed’s independence.

"If the upcoming retail sales and housing data confirm that the consumer remains resilient, we expect a decisive break of the $93,500-$95,000 resistance," Mena said. Clearing those levels could "set the stage for a run" at $100,000 before the end of the month and set up for new all-time highs this quarter, he added.