Bitcoin surges past $98.5K after US December CPI release

Bitcoin's (CRYPTO:BTC) price has surged above $98,500 following the release of December's Consumer Price Index (CPI) data by the U.S. Labor Department.

The CPI data revealed a 2.9% increase, aligning with market expectations, while the Core CPI, which excludes volatile sectors such as food and energy, registered a slight dip to 3.2%.

Despite concerns regarding inflation and the Federal Reserve's decision to maintain interest rates, the cryptocurrency market reacted positively.

Prior to the CPI announcement, Bitcoin was trading just below $97,000 but quickly jumped by $1,500 to exceed $98,500 after the news broke.

This marks Bitcoin's highest price in over a week and reflects a nearly $10,000 increase from its recent low of $89,200 recorded on Monday.

Market analysts suggest that this rapid price movement may indicate that investors were reacting ahead of the actual inflation data.

The increase in Bitcoin's value comes amid a broader positive sentiment in riskier asset classes, despite ongoing inflation concerns.

The headline CPI for December showed a month-on-month rise of 0.4%, slightly higher than November's 0.3%.

Economists view the Core CPI as a more accurate reflection of underlying inflation trends compared to the headline figure.

"Bitcoin capitalised on the inflation dip," noted one analyst, emphasising its connection to economic indicators and investor sentiment.

Traditional markets also saw gains following the CPI release, with U.S. stock index futures rising by 0.5%, while bond yields and the dollar fell sharply.

At the time of reporting, the Bitcoin (BTC) price was $99,977.93.