Bitcoin Surges 7.5% as Inflation Data Sparks Crypto Optimism

Bitcoin and altcoins have rebounded following the release of US inflation data, sparking optimism in the cryptocurrency market. The Personal Consumption Expenditures (PCE) inflation, the Federal Reserve's preferred measure, fell to 2.5% in January, in line with expectations. Core PCE inflation was reported at 2.6%, also matching forecasts, marking the first decline in PCE inflation since September 2024.

The latest data confirms steady performance both year-over-year and month-over-month. Headline PCE remained at 2.5% YoY, while core PCE—revised from a previous 2.8% (and even 2.9% in earlier revisions) to 2.6%—represents a 30 basis point improvement. This core headline reading is the lowest YoY since August 2024, and it is notable as the first slowdown in headline PCE YoY in four months. These figures suggest that easing inflationary pressures might be gradually reshaping market sentiment.

Crypto analyst BACH (@CyclesWithBach) emphasized the bullish nature of the data, noting that "this core headline number is the lowest reading YoY since August 2024" and pointing to the 30bp revision as a significant improvement. Although he warned of too much optimism, he stated: "This is a BIG difference and is in fact bullish for markets! We may still see some choppy bottoming formation, but this bull ain't over! – Credit spreads despite all this remain narrow, which is a sign that credit markets see no risk!"

Following the data release, Bitcoin recovered back above $84,000, up 3.5% since the report and about 7.5% from today’s low of $78,258. After a week in which Bitcoin suffered an 18% decline, losing $96,000, the rebound marks a clear recovery. Altcoins were similarly buoyed; Ethereum climbed 5.8%, XRP gained 9.2%, and Solana surged 16%. Notably, SOL’s rally coincides with news that the CME Group will launch Solana (SOL) futures on March 17, pending CFTC regulatory review.

Crypto analyst Kevin (@Kev_Capital_TA