Crypto Market Surge: Bitcoin Leads with 5% Increase Amid Softer U.S. Inflation Data and Market Stabilization

It was a good day for the cryptocurrency trading market on Tuesday, January 13. Coin prices surged, with Bitcoin (BTC) and Ethereum (ETH) leading the charge. As traders reacted positively to softer U.S. inflation data, analysts were waving cautionary flags about potential market fragility.

Bitcoin and Ethereum Price Surge

At the time of printing, the market price for Bitcoin had risen to approximately $95,600. This represented a 5% increase in its value across the preceding 24 hours. The currency had witnessed a substantial increase as the market’s sentiment stabilized due to positive U.S. inflation data. Meanwhile, Ethereum also enjoyed an increase in its price. On the same day, its value almost touched $3,330, which was an uptick of 8%. Larger percentage gains were not solely limited to BTC and ETH, though. As a matter of fact, Dogecoin, another top-10 crypto asset, saw a whopping 10% increase in its value, reaching approximately $0.15.

Understanding The Market Detail

While the rise in value was encouraging, Bitcoin’s sell-side risk ratio also saw a reduction but still persisted at relatively low levels not seen since October 23 of the previous year. This was pointed out by Chris Beamish, a skilled and experienced analyst at glassnode, whose insights into the crypto market environment are highly regarded. The analyst attributed the reduced sell-side risk ratio to low conviction behind distribution at the existing price levels. Furthermore, the Crypto Fear and Greed Index remained in the ‘fear’ zone on Tuesday morning. This was the third consecutive day that this index had expressed continued investor caution.

Top Assets and Their Performances

Digging deeper into the details, among the top 100 crypto assets in terms of market capitalization, Story (IP) saw an impressive surge of nearly 50% in a single day. Monero (XMR) followed suit with a commendable 15% increase as part of its multi-day rally. As is often the case, privacy-centric tokens were noted for being a lure for retail investors. Looking into the negative territory, minimal losses were noted. Zcash (ZEC) and Midnight (NIGHT) had suffered, slipping 3.2% and hence becoming the underperformers of the top 100 crypto assets.

Impact on ETFs and Broader Markets

On a broader scale, there were nearly $159 million in crypto liquidations in the last 24 hours. Short liquidations made up around $94.9 million of this figure, outweighing long liquidations, which amounted to approximately $63.8 million. For the same duration, Bitcoin accounted for nearly $44.1 million of total liquidations, followed by Ethereum which stood at around $24.9 million. For the same day, Monday, January 12, spot Bitcoin ETFs noted a net inflow of $116.7 million. This, in turn, pushed cumulative inflows to an eye-watering $56.52 billion, according to data from SoSoValue.

U.S. Inflation Data and Impact on the Crypto Market

On a macroeconomic level, the U.S. saw risk sentiment improve following the release of new inflation data. This data indicated that price pressures were easing down. As per the Bureau of Labor Statistics, core consumer prices saw a rise of just 0.2% month-over-month and 2.6% year-over-year in December. This had a domino effect on the equity markets. The S&P 500 saw a marginal rise of 0.1%, while the Dow Jones Industrial Average fell 35 points. In summary, the crypto markets are highly dynamic and fluctuating in nature. While softer inflation data in the U.S. seemed to stimulate a positive market response, careful scrutiny, and predictive insights are essential for traders to safeguard and grow their investments.