Bitcoin experienced a fresh resurgence on 14 January, maintaining its position above $96,000 during the Wall Street open. The recovery coincided with the release of US macroeconomic data, which provided a welcome boost to risk assets.

Bitcoin Gains Momentum Alongside Stocks

Data from TradingView revealed that BTC/USD extended its upward trajectory, following a dip to two-month lows the previous day. The cryptocurrency gained over 2% as the US Producer Price Index (PPI) for December came in below market expectations.

On both monthly and annual measures, PPI indicated a modest reprieve for traders and policymakers. This raised hopes of a more stable inflation outlook, despite lingering concerns over broader trends.

“The increase was smaller than expected, but PPI inflation is now at its highest since February 2023,” noted The Kobeissi Letter on social media platform X. The commentary highlighted the relief provided by the data while pointing out that inflation pressures remain significant.

While the lower-than-expected 0.2% month-over-month PPI rise boosted stocks, analysts warned of potential volatility ahead as more critical data releases, including the Consumer Price Index (CPI), loom on the horizon.

Fed Rate Policy Under Scrutiny
Trading firm QCP Capital observed that market sentiment could shift in response to the Federal Reserve’s stance on interest rates. “We think potential surprises could come on the upside as markets begin to adjust to the reality of a prolonged higher-rate environment,” QCP stated, hinting at the possibility of a rate hike.

This perspective echoed broader concerns about how inflation data might shape monetary policy, especially with investors balancing optimism with caution.

Traders Assess Bitcoin’s Next Move
Amid the broader economic backdrop, Bitcoin traders debated whether the rebound signaled sustained upward momentum. Popular trader Skew described the market sentiment as “underweight if not scared,” referencing low positioning and limited risk-taking among investors.

Other traders expressed confidence in Bitcoin’s recovery. Crypto Chase labelled the move as an “optimal local” rebound, though warned of potential bearish outcomes if prices retrace significantly.

Analyst Rekt Capital highlighted a technical pattern, pointing to an “exaggerated bullish divergence” on Bitcoin’s relative strength index (RSI). “The $91,000-$101,000 range and early-stage Higher Low on the RSI have been preserved,” he stated, underscoring positive signs for further growth.

Outlook Remains Cautiously Optimistic
With Bitcoin holding above $96,000, the market appears poised for continued volatility, influenced by upcoming CPI data and the Federal Reserve’s response to inflation trends. While traders are cautiously optimistic, many remain vigilant for potential reversals in the coming weeks.

As Bitcoin eyes the $100,000 threshold, all eyes will be on how macroeconomic data shapes the trajectory of both cryptocurrencies and traditional financial markets.