Bitcoin’s price temporarily exceeded $89,000 on Thursday following the release of US consumer price index (CPI) data that showed lower-than-expected inflation. The report indicated that the annual inflation rate for November was 2.7%, below expert forecasts and previous figures. Core CPI, which excludes food and energy, stood at 2.6%, the lowest since 2021. This data sparked a rally in Bitcoin, with its value rising from around $86,000 to briefly touch the psychological $89,000 mark, reflecting optimism that easing inflation could prompt the Federal Reserve to lower interest rates in 2026, supporting risk assets including Bitcoin.
However, this rally proved short-lived as the price retreated to near $88,000. Such short-term fluctuations have become common in recent weeks. A significant challenge remains the continuous outflow from US spot Bitcoin exchange-traded funds (ETFs), leading to reduced institutional demand and making it difficult for Bitcoin’s price to sustain gains despite positive news. Additionally, fresh US employment data showed the unemployment rate rising to 4.6%, the highest since 2021, with uneven job growth complicating the Federal Reserve’s policy decisions and suggesting cautious interest rate adjustments ahead.
Political uncertainty also persists, with former President Donald Trump advocating for substantial rate cuts and hinting at nominating a Fed chairman favoring looser monetary policy. Bitcoin’s price is currently stabilizing below the $90,000 resistance level near historic highs. Analysts suggest the market cycle may shift, potentially leading to new records and reduced volatility by 2026. Investor sentiment remains cautious, as reflected by the very low points on the Fear and Greed Index, which could present buying opportunities for those willing to endure market emotional swings.
Source: bitcoinmagazine
