The global cryptocurrency market witnessed a notable rally today, fueled by favorable U.S. Consumer Price Index (CPI) data and optimism surrounding a potentially crypto-friendly regulatory environment under U.S. President-elect Donald Trump. The global crypto market cap rose by 3.34% in the past 24 hours, reaching $3.48 trillion as of January 16.
Several factors contributed to the surge, answering the question: Why is crypto up today?
CPI Relief Boosts Confidence: The December CPI report showed a 0.4% monthly increase, slightly exceeding expectations but indicating a cooling trend in core inflation, which rose 0.2%. Year-over-year, core CPI dipped to 3.2%, below projections. Analysts predict the Federal Reserve may hold interest rates steady during its January 29 meeting, as futures markets now show a 97.3% likelihood of no rate hikes.
Spot Bitcoin ETFs and Institutional Inflows: Renewed interest from both retail and institutional investors is evident. U.S. spot Bitcoin ETFs saw net inflows of $755 million on Wednesday, while spot Ethereum ETFs recorded $59 million, reflecting optimism in the market.
Trump Inauguration and Regulatory Optimism: Market sentiment has improved with expectations for a crypto-friendly regulatory framework under Trump’s administration. State-level initiatives like Texas’s proposed Strategic Bitcoin Reserve have also bolstered confidence.
The Fear and Greed Index shows the current market sentiment for cryptocurrencies, with today's value at 75 (Greed), reflecting a bullish outlook. This indicates heightened investor confidence, a potential driver for the recent rise in crypto prices.
Yesterday, the index was slightly lower at 70 (Greed), and last week it stood at 69 (Greed), signaling steady optimism. However, a month ago, the market was at 87 (Extreme Greed), suggesting even higher enthusiasm. The current greed level highlights strong market momentum, likely fueling today's crypto surge.
Bitcoin (BTC) led the bullish momentum, surging 2.23% in 24 hours to hover at $99,178.26, with a market cap of $1.96 trillion. Ripple's XRP recorded an intraday jump of 9.56%, trading at $3.09 with a $177.73 billion market cap. Solana (SOL) rose by 7.22%, trading at $201.31 and holding a $97.37 billion market cap, while Dogecoin (DOGE) increased 5.62% to $0.3757 with a $55.31 billion market cap.
These gains reflect renewed confidence in the crypto market, which has recently been consolidating under key resistance levels.
Also read: City Holder Daily Combo and Daily Quiz January 17, 2025