Bitcoin crosses $101,000 amid optimism over US inflation data likely pushing a Fed rate cut decision

The world’s biggest cryptocurrency Bitcoin, has resumed its way past the $100,000 level on December 12, as the recent United States inflation data increased likelihood of the Federal Reserve (Fed) deciding on an interest rate cut, according to a Bloomberg report.

Since US President-elect Donald Trump‘s election victory, Bitcoin has surged by significant levels. Further, Trump’s moves to undo crackdowns on the sector imposed by Joe Biden’s administration has driven the rally, it added.

On December 5, Bitcoin cracked its record all-time high of $103,800. But has since struggled to stay above $100,000 as traders booked profit. However, bets on the likely Fed rate decision is boosting the token again.

Bitcoin Rising

On December 11, the crypto token rose 5 per cent in the US, and showed at $100,665 at 8.52 am on December 12 in Singapore, the report added.

At time of writing this, at 9.00 am in Mumbai, the token was at $101,3.73, according to data on Coinmarketcap.com. This is a 4.30 per cent increase over the previous day. Bitcoin market cap was also up 4.30 per cent to $2.01 trillion on December 12, the tracking website.

The global cryptocurrency market capitalisation on December 12 was up 5.53 per cent from the previous day, at $3.64 trillion. Bitcoin’s share in the market pie is a dominant 55.09 per cent, according to Coinmarketcap data.

Bitcoin has surged by close to 50 per cent since Trump’s November 2024 win. US spot Bitcoin exchange-traded funds (ETFs) have seen inflows worth $11 billion over the same period, as per the report.

Even the second largest token, Ether, has attracted around $2.4 billion worth of investments, it added.

Factors For Bitcoin Rise

• The US CPI inflation data met the forecast and “cemented expectations” that the country’s central bank will reduce borrowings next week. Henry Elder, a principal at UTXO Management, told Bloomberg, “The market likes seeing inflation come in within expectations. Traders are “trying to figure out if $100,000 is a ceiling or a floor.”
• Trump has indicated he favours a “strategic national Bitcoin stockpile”, though there is no concrete plan yet. Speaking to Bloomberg TV, his son Eric Trump was emphatic that the President-elect would “be an unbelievable ally to the industry.”
• According to Avinash Shekhar, Co-Founder & CEO, of Pi42, Bitcoin has “demonstrated bullish momentum” due to macroeconomic data and hints at rate reductions from the Fed.

More Increase Likely?

“Optimism is that Bitcoin might target $112,000 and could go up another level to hit $125,000. Resistance at $104,088 could keep volatility in check in the shorter term as market can see consolidations,” according to Shekhar.

In fact, he believes that not only Bitcoin, but other cryptos such as XRP, Musk’s favoured Dogecoin, and Ethereum will also move upward. 

“As Ethereum targets $4,500 if a key breakout is above $4,000 and XRP on rebound support at above $2.30 puts the aim at $3.50. Meanwhile, Dogecoin climbing from oversold territory shows renewed demand and improves optimism in the market. This could indicate a wider rally among altcoins and keep the bullish sentiment alive in the crypto market as investors wait for clearer signs of the macroeconomic stability,” he added.

(With inputs from Bloomberg)

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