The cryptocurrency market is currently experiencing a bullish trend, with Bitcoin trading above $95,000, Ether at $3,333, and XRP exceeding $2.15. The total market capitalization has surpassed $3.2 trillion, reflecting a daily increase of more than 3% within the last 24 hours. This upward movement coincides with U.S. equities hitting new record highs and inflation data meeting market expectations.
The catalyst for this surge appears to be the release of the U.S. December consumer price index (CPI) data. The headline CPI increased by 2.7% year over year, aligning with predictions, while the core CPI rose by 2.6%, slightly below forecasts. These figures alleviated fears of immediate policy tightening, restoring investor confidence in risk assets. As Bitcoin broke through the $94K and $95K thresholds, the market witnessed a significant acceleration in short liquidations, resulting in the closure of over $408 million in short positions within just a few hours.
This breakout signifies Bitcoin“s highest value since November 2025, attracting attention from both retail and institutional investors.
Following Bitcoin“s lead, major altcoins also capitalized on the momentum. Ether surged over 7% in a 24-hour period, supported by increasing spot trading volumes and renewed interest from institutions. Similarly, XRP experienced a gain of over 5%, buoyed by the overall market strength and positive sentiment regarding regulatory developments in the United States. When Bitcoin confirms a breakout, it often triggers a liquidity rotation into established altcoins, a trend that was evident as SOL, BNB, LINK, and ADA also reported solid gains.
The NFT sector showed the strongest performance of the day, rising by 8.34% according to data from SoSoValue. This increase indicates a resurgence of speculative interest in digital assets, as NFT-linked tokens typically react first when traders feel more comfortable taking risks. The strong performance across this sector suggests that investors are beginning to shift away from defensive strategies.
Record Highs in Equities Support Crypto Sentiment
The gains in the crypto market are paralleled by record highs in U.S. equities, with the S&P 500 reaching an intraday peak of nearly 6,986 on January 12 and closing at a record 6,977. The Dow Jones Industrial Average also achieved new highs on the same day. Markets absorbed news regarding a Department of Justice investigation into Federal Reserve Chair Jerome Powell without significant disruption, as investors remained focused on technology sector strength and resilient corporate earnings.
This calm response from the equities market has reinforced confidence in risk assets, including cryptocurrencies.
Future Rate Cut Expectations Fuel Market Activity
The CPI data has also bolstered expectations regarding potential future cuts to Federal Reserve interest rates. Following the announcement, the likelihood of an April rate cut increased from 38% to 42%. Although policymakers continue to advocate for a patient approach, softer inflation trends lend credence to the possibility of easing later in the year. The political discourse around aggressive rate cuts, including comments from President Trump, has added tension with Powell, yet markets appear to respond more to changing probabilities than political rhetoric.
Lower interest rate expectations generally favor assets like cryptocurrencies that benefit from increased liquidity.
Regulatory Developments Enhance Market Stability
Recent regulatory advancements have provided an additional layer of support to the market. The U.S. Senate has moved forward with a draft crypto market structure bill, known as the CLARITY Act. This proposal aims to define regulatory oversight, clarify the roles of various agencies, and establish clearer pathways for crypto projects. SEC Chair Paul Atkins has expressed optimism about the bill potentially becoming law this year. These clearer regulations can reduce uncertainty, thereby encouraging greater institutional participation in the crypto space.
As equities reach new heights and inflation remains stable, the cryptocurrency markets have garnered renewed momentum. Whether this alignment continues will hinge on macroeconomic data, policy guidance, and sustained performance above critical technical levels. Currently, the appetite for risk appears to be firmly reestablished.
