SKN | Bitcoin Rallies Above $93,500 After CPI Data Boosts Rate-Cut Expectations, Eyes Key Resistance Zone

Bitcoin extended its January rebound on Tuesday, rising more than 2% to trade around $93,500 as fresh US inflation data reinforced expectations for further interest-rate cuts in 2026. The move comes amid a complex macro backdrop marked by easing price pressures, political uncertainty in Washington, and renewed interest in Bitcoin as a hedge against policy risk and currency debasement.

The rally places the world’s largest cryptocurrency back at a technically significant level, with traders closely watching whether it can break through a resistance band that has capped prices for nearly two months.

Inflation Data Rekindles Risk Appetite

The catalyst for Bitcoin’s advance was the latest US Consumer Price Index (CPI) report, which showed headline inflation holding steady at 2.7% in December, in line with expectations. More notably for markets, core CPI—excluding food and energy—came in below consensus estimates, reinforcing the narrative of a “soft landing” for the US economy.

Lower inflation typically strengthens the case for monetary easing, and markets responded by rotating back into risk assets. Bitcoin rebounded from weekend lows near $91,000, while Ether rose roughly 1.7% to around $3,185. The broader CoinDesk 20 (CD20) index gained about 1.4% over the same period.

Traditional markets painted a mixed picture. While crypto and gold moved higher—spot gold breached $4,600—US equities lagged, with the S&P 500 and Nasdaq slipping around 0.2%. The divergence highlights Bitcoin’s evolving role as a macro-sensitive asset that can outperform when confidence in fiat policy frameworks wavers.

Rates, Politics, and the Macro Narrative

Despite the CPI-driven optimism, near-term rate-cut expectations remain muted. On prediction markets, the probability of a 25-basis-point Federal Reserve cut this month sits below 6%, according to Polymarket and Kalshi. Still, analysts argue that the direction of travel matters more than the timing.

Matt Mena, crypto strategist at digital asset investment firm 21Shares, said the CPI report helped clear lingering uncertainty from late 2025. He noted that softer core inflation strengthens the case for additional easing later this year, even as political tensions complicate the outlook.

Those tensions include growing friction between President Donald Trump and Federal Reserve Chair Jerome Powell, with reports of a Department of Justice subpoena raising concerns about the Fed’s independence. For some investors, such uncertainty reinforces Bitcoin’s appeal as an asset insulated from direct political control.

Technical Resistance and the Path to $100,000

From a market-structure perspective, Bitcoin now faces a critical test. The $93,500–$95,000 zone has acted as a ceiling for nearly two months, repeatedly rejecting upside attempts. A decisive break above this range could trigger momentum-driven buying and short-covering.

Mena said that clearing resistance would open the door to a potential run toward $100,000, possibly before the end of the month, provided upcoming data supports the risk-on narrative. Key releases include US retail sales and housing data, which will offer insight into consumer resilience amid tighter financial conditions.

Beyond macro data, investors are also monitoring progress on US digital asset market structure legislation. A revised Senate draft unveiled this week reportedly includes compromises on stablecoin yields and protections for decentralized finance. Passage of such a bill could provide regulatory clarity that encourages further institutional allocation to crypto.

Investor Psychology and Market Positioning

Psychologically, Bitcoin’s resilience above $90,000 appears to be reinforcing confidence among long-term holders, while short-term traders focus on the resistance breakout. The combination of easing inflation, political noise, and relative strength versus equities has revived the “digital gold” narrative, particularly as bullion prices also trend higher.

At the same time, failure to break above $95,000 could invite profit-taking and renewed consolidation, underscoring the importance of confirmation rather than anticipation.

Looking ahead, Bitcoin’s near-term direction will likely hinge on whether macro tailwinds—lower inflation, potential rate cuts, and regulatory progress—can overpower technical resistance and lingering policy risks. A sustained move higher could reshape expectations for the first quarter, while rejection at current levels would keep markets range-bound and data-dependent.