Crypto Gains Mirror S&P 500 Peak as CPI Holds Steady

The crypto market trades bullish at the time of writing, with Bitcoin above $95,000, Ether holding at $3,333, and XRP trading above $2.15. Total crypto market cap has climbed past $3.2 trillion, marking a daily increase of more than 3% in the last 24 hours. 

This broad advance unfolded as U.S. equities reached fresh record levels and inflation data met expectations. The timing raises a clear question. Why did digital assets respond so strongly now?

Bitcoin Breaks Key Levels After CPI Release

Bitcoin led the rally following the release of U.S. December consumer price index data. Headline CPI rose 2.7% year over year, matching forecasts, while core CPI increased 2.6%, slightly below expectations. 

These figures eased concerns around sudden policy tightening and helped restore confidence in risk assets. As Bitcoin pushed through $94K and $95K, short liquidations accelerated. 

Roughly over  $408 million in short positions closed within hours, adding upward pressure as prices moved higher. The breakout marked Bitcoin’s highest level since November 2025.

Ethereum and XRP Follow Bitcoin Higher

Large-cap altcoins tracked Bitcoin’s momentum closely. Ether jumped over 7% in 24 hours, supported by rising spot volume and renewed institutional interest. XRP gained over 5%, reflecting broader market strength and improving sentiment tied to regulatory clarity in the United States. 

When Bitcoin confirms a breakout, liquidity often rotates quickly into established altcoins. That pattern appeared again as SOL, BNB, LINK, and ADA also posted solid gains during the session.

NFTs Lead as Speculative Appetite Returns

The NFT sector posted the strongest performance of the day, rising 8.34% according to SoSoValue data. This surge signaled a return of speculative appetite across digital assets. NFT-linked tokens often respond first when traders grow more comfortable with risk. 

Their outperformance suggested that investors felt confident enough to move beyond defensive positioning. While volatility remains a factor, sector-wide participation showed a coordinated shift rather than isolated trading.

S&P 500 Records Support Risk Sentiment

Crypto gains unfolded alongside record highs in U.S. equities. The S&P 500 reached an intraday peak near 6,986 on January 12 and closed at a record 6,977. The Dow Jones Industrial Average also set new highs the same day. Markets absorbed news of a Department of Justice investigation involving Federal Reserve Chair Jerome Powell without lasting disruption. 

Investors focused instead on technology strength and corporate earnings resilience. This calm response reinforced confidence across risk assets, including cryptocurrencies.

Rate Cut Expectations Add Momentum

CPI data also strengthened expectations for future Federal Reserve rate cuts. Following the report, the probability of an April rate cut rose from 38% to 42%. While policymakers still signal patience, softer inflation trends support the case for easing later in the year. 

President Trump renewed public calls for aggressive rate cuts, intensifying tension with Powell. Despite the political noise, markets reacted to shifting probabilities rather than rhetoric. Lower rate expectations tend to favor assets like crypto that benefit from liquidity expansion.

Regulation Progress Supports Market Structure

Regulatory developments added another layer of support. The U.S. Senate advanced a draft crypto market structure bill, often referred to as the CLARITY Act. The proposal seeks to define regulatory oversight, clarify agency roles, and establish clearer pathways for crypto projects. SEC Chair Paul Atkins has expressed confidence that the bill could become law this year. Clearer rules reduce uncertainty, which often encourages institutional participation.

As equities hit new highs and inflation holds steady, crypto markets have found fresh momentum. Whether this alignment continues will depend on macro data, policy signals, and follow-through above key technical levels. For now, risk appetite appears firmly back on the table.