Bitcoin News Today: Bitcoin Rises Above $88,000 on Weak CPI Data, ETF Inflows Fuel Caution

Bitcoin edged higher above $88,000 on Monday amid a brief rebound for the broader crypto market. Ethereum and XRP also rose, supported by inflows into spot ETFs and cautious optimism following softer-than-expected U.S. inflation data. However, the rally came amid a backdrop of ongoing bearish sentiment, with Bitcoin ETFs recording outflows of $161 million the previous week.

The rebound followed the release of November U.S. Consumer Price Index (CPI) data, which showed inflation rising by 2.7%, below expectations of 3.1%. Core CPI, excluding volatile food and energy prices, also came in below forecasts at 2.6%. The data tempered market expectations for aggressive rate cuts in 2026, but did not fully reverse the sell-off trend in crypto assets.

Meanwhile, XRP stood out as a bright spot, with spot ETFs recording $30 million in inflows on Thursday, defying the broader trend. Ethereum, by contrast, faced six days of consecutive outflows, totaling $97 million. Investors remain cautious as Bitcoin continues to trade below key moving averages and faces uncertainty ahead of the Federal Reserve's rate decisions.

How the Market Reacted

Bitcoin's price rebound was limited, with the asset hovering just above $88,000 and struggling to break out of a descending trendline on the daily chart. Technical indicators, including the Relative Strength Index (RSI) at 44, suggested that bearish momentum was easing, but the Moving Average Convergence Divergence (MACD) indicator remained in a bearish range. Bulls would need a strong close above the 50-day EMA to regain control.

Ethereum mirrored Bitcoin's mixed performance, trading just above $2,900 but struggling to push past the

$3,000 level. The asset's RSI climbed to 44, signaling a slight easing in bearish pressure, but the MACD remained a key hurdle for further gains. XRP, on the other hand, showed more resilience, maintaining support above $1.82 and continuing to attract inflows into ETFs.

The broader crypto market, however, remained fragile. Bitcoin ETF outflows continued to reflect bearish sentiment among institutional investors, with Fidelity's FBTC and Bitwise's BITB recording the largest withdrawals. Ethereum ETFs also extended their outflow streak, with BlackRock's ETHA ETF posting the largest outflow of $139 million.

What Analysts Are Watching

Analysts are closely watching for signs of a potential reversal in the bearish trend, especially as Bitcoin's RSI inches closer to the 50 midline. A breakout above the descending trendline and the 50-day EMA at $95,111 would be seen as a bullish signal, potentially opening the door to a recovery toward $100,000. However, the path is not clear, and the MACD remains a key indicator to watch for confirmation of a sustained turnaround.

Ethereum's technical outlook is similarly cautious, with bulls needing to push the asset above $3,000 and the 50-day EMA at $3,261 to regain control. A daily close above this level would be critical for reversing the downward trend and rekindling investor confidence. For XRP, a breakout above $2.51 would be necessary to break the bearish structure and support a corrective rally.

Looking ahead, market participants are also monitoring the Federal Reserve's policy outlook and the potential impact of the upcoming rate decisions. While the Fed's recent 25 basis point cut in December has tempered expectations for aggressive rate cuts in 2026, the central bank's stance will remain a key factor influencing investor sentiment in the crypto space.

Risks to the Outlook

Despite the recent rebound, the broader crypto market remains under pressure, with Bitcoin and Ethereum trading below their key moving averages. The ongoing outflows from ETFs and the dominance of bearish indicators highlight the fragile nature of the current market. A failure to break above critical technical levels could extend the downtrend and lead to further declines toward key support levels.

Another risk is the impact of macroeconomic factors, including global financial conditions and the performance of traditional asset classes. As Bitcoin and other cryptocurrencies remain highly sensitive to macro trends, any renewed weakness in equities or rising interest rate expectations could trigger further sell-offs in the crypto space.

Investors are also watching for any regulatory developments, particularly as the U.S. Senate prepares to consider the Clarity Act in January. The proposed legislation, which seeks to provide regulatory clarity for digital assets, could play a pivotal role in shaping the long-term outlook for the industry.