Bitcoin Rises to Two-Month High Amid Economic Developments
Bitcoin continued its upward trajectory on Tuesday, reaching a two-month peak, as U.S. corporate earnings showed signs of improvement and investors took in new inflation data.
The largest cryptocurrency gained approximately 4.5% during the day, trading at just over $95,500, based on CoinGecko’s figures. This marks its highest level since mid-November.
This surge aligns with estimates that indicate around $587 million in short positions in cryptocurrencies were liquidated, including about $292 million specifically related to Bitcoin, as noted by CoinGlass.
Ryan Rasmussen, head of research at Bitwise, reflected on the recent events which underscore the reasons behind Bitcoin’s creation. He pointed to the fall of Iran’s fiat currency and the recent circumstances in Venezuela as significant catalysts for this trend.
“Each of these events carries its own significance,” he remarked.
On the flip side, traditional markets seem to be facing complexities. Financial stocks pressured major U.S. indexes after JPMorgan Chase & Co. released disappointing results, dragging down shares by over 4% and impacting the whole financial sector.
While the S&P 500 and Nasdaq remained close to their recent highs, the Dow Jones Industrial Average lagged behind as bank earnings influenced the quarter’s outlook.
Investors were also analyzing December’s consumer price index data, which indicated that U.S. inflation is stabilizing. The “core” inflation rate climbed by 2.6%, with the economy growing at an annual rate of 2.7%, aligning with expectations.
Both the headline CPI and core CPI reflected modest month-to-month increases. This report seems to support the view that the Federal Reserve will likely maintain current interest rates in the short term, although the market is pricing in a potential rate cut for the latter half of 2026.
The market saw minor fluctuations in the dollar and U.S. Treasury yields, while stock price volatility appeared subdued.
Although inflation results have steadied, they still exceed the Fed’s 2% target, offering policymakers some leeway to cautiously pursue easing measures while keeping an eye on potential rate cuts as the economy cools.
President Donald Trump leveraged this data to advocate for policy changes and renewed calls for the Federal Reserve to reduce interest rates.
Traders in the cryptocurrency space are notably responsive to alterations in liquidity and monetary policy outlooks, factors that contributed to a rise in risk assets in late 2025.
Bitcoin’s recent rally follows a phase of consolidation, with market participants adjusting to macroeconomic indicators and shifting sentiment towards the digital asset improving compared to late last year.
Bill Berhyde, founder and CEO of Abra, commented, “Bitcoin’s price seems closely connected to anticipated global liquidity.” He added that markets expect a significant expansion in money supply this year, mainly due to increased government bond purchases. Retail stimulus ahead of the midterm elections might also provide an additional boost.
