Investing.com-- Bitcoin recovered sharply on Tuesday after a muted performance in the last few days, while investors cautiously awaited the U.S. inflation report to gauge the Federal Reserve’s interest rate outlook.
Bitcoin jumped more than 5% to $97,111.0 by 09:47 ET (14:47 GMT).
The token had reached a session low of $89,664.8 on Monday, but dip buyers emerged and pushed prices higher.
Risk sentiment present despite looming CPI data
Crypto traders showed an appetite for risk assets on Tuesday, despite an important U.S. Consumer Price Index (CPI) release a day later.
The Federal Reserve’s hawkish stance in December, signaling fewer interest rate cuts in 2025, has increased market sensitivity to inflation data.
Recent economic indicators, including a robust December jobs report, have led to a reassessment of the likelihood of near-term rate cuts by the Fed.
A higher-than-expected inflation reading may reinforce the Fed’s hawkish stance, potentially exerting additional downward pressure on Bitcoin.
Higher interest rates can exert downward pressure on Bitcoin and other cryptocurrencies, as they often lead to a stronger U.S. dollar and reduced liquidity in financial markets.
Tether plans to shift its HQ to EL Salvador
Tether, the world’s largest stablecoin issuer, plans to relocate its headquarters to El Salvador, according to its CEO. The move aligns with El Salvador’s ambitions to position itself as a hub for cryptocurrency trading.
Tether has solidified its leadership in the rapidly growing stablecoin market, offering a digital currency pegged to traditional currencies. This structure allows users to transfer funds between cryptocurrencies while avoiding price volatility.
El Salvador has been actively promoting digital currency adoption. In 2021, President Nayib Bukele made history by declaring bitcoin legal tender alongside the U.S. dollar, bolstering the country’s reputation as a crypto-friendly destination.
Fundstrat’s head of research sees Bitcoin hitting $250k by year-end
Bitcoin dipped below $90,000 on Monday before staging an impressive rebound above $97,000 today. Bitcoin advocate Tom Lee, head of research at Fundstrat, commented on the recent dip during a CNBC interview, describing it as a routine fluctuation for the cryptocurrency.
"Bitcoin is down 15% from its highs for a volatile asset, which is a normal correction," Lee stated.
Lee identified $70,000 as a critical support level, using Fibonacci retracement levels to explain Bitcoin’s potential pullback patterns from its rally starting point. Should the $70,000 threshold fail, he suggested that Bitcoin could test the $50,000 mark. Analysts commonly monitor Fibonacci levels at 23.6%, 38.2%, 50%, and 61.8% during corrections.
Despite the short-term volatility, Lee remains optimistic about Bitcoin’s outlook for 2025, maintaining an end-of-year price target of $200,000 to $250,000.
Crypto price today: altcoins track Bitcoin’s rebound
In the broader cryptocurrency market, most altcoins rose sharply higher, tracking Bitcoin’s recovery.
World no.2 crypto Ether rose 6% to $3,199.96.
World no.3 crypto XRP rose 5.6% to $2.584.
Solana leapt 7% higher, and Polygon rose 6.5%, while Cardano surged 10%. Among meme tokens, Dogecoin jumped over 9%.
Ayushman Ojha contributed to this report.