Bitcoin, Ethereum, Dogecoin Spike Amid Hotter-Than-Expected Inflation Numbers: ETH's Decisive Move Above $3,000 Could Restore Confidence, Says Analyst

Bitcoin, Ethereum, and Dogecoin prices surged on Tuesday, February 12, 2025, as investors reacted to hotter-than-expected wholesale inflation data. The cryptocurrencies gained 2.53%, 2.83%, and 5.58% respectively, with Bitcoin reclaiming the $100,000 level and Ethereum approaching $3,000. The rally came a day after the leading cryptocurrencies slipped below key support levels, with Bitcoin dipping below $90,000 and Ethereum falling below $3,000.



The dramatic turnaround in the crypto market can be attributed to a combination of factors, including market sentiment, institutional investment, and macroeconomic conditions. The hotter-than-expected wholesale inflation data, which showed a 0.4% increase in November against expectations of 0.2%, sparked a crypto market decline on Monday. However, the market recovered on Tuesday, with Bitcoin soaring to a weekly high of $102,250 and Ethereum reclaiming the $3,000 zone.



The positive correlation between cryptocurrency prices and inflation expectations is further supported by the rise in Ethereum funding rates and the increased buying pressure from US-based whales. On Tuesday, the Ethereum funding rate rose to 0.4%, its highest level in over 40 days, indicating that speculative traders were placing more leveraged bullish bets on an imminent ETH price upswing. Additionally, the Ethereum Coinbase Premium index stood at 0.04 on the same day, trending in positive values since February 8, 2025, suggesting that US-based corporates and high-net-worth investors were actively buying ETH on Coinbase Pro.



The hotter-than-expected inflation numbers, combined with the bullish sentiment among traders and the increased buying pressure from institutional investors, have contributed to the recent spike in Bitcoin, Ethereum, and Dogecoin prices. This positive correlation implies that cryptocurrencies may continue to perform well in an environment of rising inflation expectations, as investors seek alternative assets to hedge against the devaluation of fiat currencies.

However, it is essential to monitor macroeconomic developments and market sentiment to assess the sustainability of this trend. While the recent rally in cryptocurrency prices is encouraging, investors should remain cautious and maintain a diversified portfolio to mitigate risks associated with market volatility.

In conclusion, the recent spike in Bitcoin, Ethereum, and Dogecoin prices can be attributed to a combination of factors, including market sentiment, institutional investment, and macroeconomic conditions. The hotter-than-expected inflation numbers have contributed to the rally, with Ethereum's potential to decisively move above $3,000 being a key factor in restoring investor confidence in the cryptocurrency market. However, investors should remain vigilant and monitor macroeconomic developments to assess the sustainability of this trend.