XRP, Dogecoin Propel Crypto Rally; Bitcoin Hits $96K as Market Awaits Inflation Insights

The ongoing downturn in stocks and cryptocurrencies may make the traditional “sell-the-news” scenario for Donald Trump’s inauguration less likely, according to K33 Research.

Bitcoin (BTC) surged back on Tuesday, recovering from a dip below $90,000 the previous day. The rally was triggered by reports of upcoming pro-crypto executive orders from Trump’s incoming administration and better-than-expected U.S. Producer Price Index (PPI) data for December.

BTC was trading at $96,500, up 3% from the previous day, while the broader CoinDesk 20 Index, which tracks the major cryptocurrencies, posted a 5% gain. XRP and dogecoin (DOGE) led the altcoin charge with 6%-7% gains.

U.S. equities, however, remained largely unchanged, with the Nasdaq and S&P 500 closing flat as traders processed the latest economic data.

Bitcoin continues to hover above $90,000, maintaining a sideways consolidation as markets contend with rising bond yields and a stronger U.S. dollar. A string of stronger-than-expected economic reports has reduced expectations for further Federal Reserve rate cuts in 2025.

Wednesday’s Consumer Price Index (CPI) report is expected to fuel additional volatility, as traders look for clues on the Fed’s next moves.

The upcoming Jan. 20 inauguration is also in focus, with growing speculation about Trump’s pro-crypto actions potentially moving markets.

K33 Research had initially predicted that the inauguration could spark a “sell-the-news” event due to heightened market expectations. However, the firm has revised its outlook given the recent market pullback.

“While our previous forecast favored de-risking before the inauguration, the recent market downturn makes this strategy less appealing unless we see a substantial recovery in momentum over the next few days,” the report stated.

“The S&P 500 retraced its post-election gains, and bitcoin tested its lowest levels in two months,” the analysts continued. “Any de-risking decisions will be highly dependent on upcoming price action, but we remain confident in the long-term bullish outlook for bitcoin driven by Trump’s anticipated pro-crypto stance.”