Bitcoin back above $96,000 in stunning reversal as weak inflation boosts risk appetite

Bitcoin jumped on Tuesday, gaining along with other riskier assets as traders digested light inflation readings.

The price of the flagship cryptocurrency rose 4% to $96,781.15 on Tuesday, according to Coin Metrics, after falling below the $90,000 support level earlier in the week. The broader crypto market as measured by CoinDesk 20 the index added 3.9%.

Actions Coinbase and Micro strategy gained more than 3% and 5%, respectively. Mining reserves Mara Holdings Company and Basic scientific grew by about 5%.

The move came as the Bureau of Labor Statistics reported lower than expected inflation Tuesday. The producer price index, which measures wholesale inflation, rose just 0.2% in December, while economists polled by Dow Jones had expected a 0.4% rise.

Crypto prices stuck in a tug of war between investor concerns about rising inflation under the incoming administration of Donald Trump and optimism about the president-elect’s crypto leadership, which could significantly support the industry this year. As a result, traders expect January to be more volatile than expected and could continue throughout the quarter.

Bitcoin fell last week after stronger-than-expected wages sent bond yields soaring, prompting investors to move away from riskier, growth-oriented assets. Headlines about Trump’s tariff plans also spooked investors, giving a boost to the dollar, which has an inverse relationship with bitcoin.

Fundstrat’s Tom Lee told CNBC “box” Monday that bitcoin can be fixed up to $70,000 before breaking new records and eventually ending the year between $200,000 and $250,000. Crypto traders are used to sharp declines in Bitcoin during a bull market.

Bitcoin is down 10% from its record high on December 17th. In 2025, it grew by 3%.