After the release of the US Producer Price Index (PPI) data, Bitcoin continued to rebound and rose back above $96,000, with a 2.5% increase in the past 24 hours. Among the major altcoins, XRP and DOGE led the gains with increases of 6% to 7%.

 

The PPI data proved to be a "timely rain" as Bitcoin strongly broke through $97,000.

 

The report shows that the US PPI in December only increased by 0.2% month - on - month, lower than the 0.4% of the previous month and also lower than the 0.4% unanimously expected by economists. As a leading indicator of the Consumer Price Index (CPI), the PPI plays an important role in the overall inflation level. The cooling of the PPI is a positive signal for the Federal Reserve's next move.

 

The previous day, the Washington Post reported that sources close to the new Trump administration revealed that the president - elect would issue executive orders related to cryptocurrencies after taking office. These orders are expected to address the so - called "de - banking" issue and reverse the controversial SAB 121 policy, which restricts banks from providing services to cryptocurrency companies.

 

Mike Novogratz, a cryptocurrency billionaire and founder of Galaxy Digital, mentioned last year that SAB 121 was one of the policies of the Joe Biden era, and it would be quickly repealed after Trump took office.

 

The Washington Post reported that Trump was willing to support a cryptocurrency legislative strategy in the early days of his presidency, driven by a group of Silicon Valley tycoons, including Marc Andreessen, a general partner of A16Z. As soon as this news came out, the cryptocurrency market immediately rose.

 

 

Derivatives market data shows that the volatility of Bitcoin and other cryptocurrencies is expected to continue to climb. The short - term implied volatility of Bitcoin options remains high. At the same time, the VIX index, which measures the volatility of the US stock market, also remains at a relatively high level, indicating an increase in overall market uncertainty.

The PPI data proved to be a "timely rain" as Bitcoin strongly broke through $97,000.

According to data from Deribit, the expiration date of Bitcoin options for the first time this year is January 24th, two days after Trump's inauguration. The market's attitude towards this point in time is slightly optimistic, and the demand for call options is relatively high. Among them, the call option contracts with a strike price of $99,000 are the most concentrated. Analysts at QCP Capital believe that derivatives market data indicates that market volatility will persist in January.

K33 Research had previously predicted that the inauguration day might be a good time to sell, but the recent general decline in the stock market and digital assets has led it to adjust this view. The institution said that although the attractiveness of selling on the inauguration day has weakened, the market still needs to closely monitor the price movements next week. The report pointed out: "Although our previous monthly outlook tended to sell on the inauguration day, given that both the stock market and Bitcoin recently hit two - month lows, the attractiveness of this strategy has significantly decreased. The S&P 500 index filled the post - election gap yesterday, and Bitcoin also hit a two - month low. Risk - off operations will entirely depend on the price movements next week, and the impact will be short - lived, as we are optimistic about Trump's long - term impact on BTC."

The cryptocurrency research firm 10x Research said in a report that when the Federal Reserve considers the impact of inflation, "lower - than - expected inflation data may trigger a rise in Bitcoin."

Geoffrey Kendrick, head of digital asset research at Standard Chartered Bank, said in a research report on January 14th that Bitcoin is currently under pressure from macro risks, and any pullback below $90,000 represents a "medium - term" buying opportunity.

The report said: "If we do retest that level (if it breaks below $90,000, I expect it to fall below $80,000), I would consider it an excellent medium - term buying opportunity." Despite short - term risks, Standard Chartered Bank reiterated its long - term price target for Bitcoin to reach $200,000 by the end of 2025.

Cryptocurrency traders should already be accustomed to large short - term pullbacks during bull markets. Tom Lee, co - founder of Fundstrat, said on CNBC's "Squawk Box" program that the price of Bitcoin could pull back to $70,000, then hit a new high, and eventually reach between $200,000 and $250,000 by the end of the year.