US Inflation Report Sparks Crypto Market Volatility
The US Consumer Price Index (CPI) for November rose 2.7% year-over-year (YoY). This was below the forecast of 3.1% and lower than September’s 3.0%, reported the Bureau of Labor Statistics (BLS). Core CPI, which excludes food and energy, increased 2.6% YoY. This is the lowest reading since March 2021 and closer to the Federal Reserve’s 2% inflation target.
Following the report, Bitcoin (BTC) rose about 2%, nearing $90,000. Ethereum (ETH) surpassed $2,900. XRP and Solana (SOL) also saw small gains.
Crypto Prices Drop After Initial Gains
Despite the initial rise, top cryptocurrencies lost most of their gains. The market remains under pressure with a risk-off sentiment. Options data show traders expect prices to fall by year-end.
Nick Forster, founder of onchain options platform Derive, said market volatility is rising. “30-day BTC volatility has climbed toward 45%, while skew stays near -5%,” he said. This signals traders expect continued downside risk in the first half of next year.
- Significant put options are concentrated around the $85,000 strike price.
- Calls cluster near the $100,000 and $120,000 strike prices.
- Traders expect BTC prices may dip below $85,000 but could rise later.
Stock Markets Also Respond to Inflation Data
Along with cryptocurrencies, US stock markets also moved higher. The S&P 500 rose 1%, and the Nasdaq gained 1.5% at the time of the report. This boosted talks of a possible rate cut from the Federal Reserve in its January meeting.
