Inflation in the U.S. increased by 6.5% year-on-year in December and decreased by 0.1% month-on-month.
Cryptocurrencies and traditional stock markets were buoyed as CPI data met estimates. Bitcoin initially dipped following the news before recovering to trade higher.
The leading cryptocurrency by market cap was trading at $18,291 by 8:55 a.m. EST, according to TradingView data.
Financial markets have been trading higher over the past few days following last Friday's jobs report in the U.S.; some commentators see the rally continuing.
Traders will continue to be bullish as long as the year-on-year increase is below 6.6% or 6.7%, Bit Mining's Chief Economist Youwei Yang told The Block ahead of the news.
"This could give the macro environment and crypto market some sentiment to rally for the short term," Yang said. "The market is betting the Fed won't have the guts to raise the final interest rate above 5.25%, as it could mean difficulty to pay back national debt and also market liquidity."
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