Bitcoin (BTC) is regaining bullish momentum after the release of favourable U.S. Consumer Price Index (CPI) data for December. The cryptocurrency surged approximately 3%, climbing from $96,000 to nearly $100,000, buoyed by cooling core inflation that undershot market expectations. Analysts anticipate that sustained inflation control could lead to further Federal Reserve rate cuts, providing a tailwind for Bitcoin and other risk assets.

Bryan Armour, Morningstar’s director of passive strategies research, noted Bitcoin’s parallels with gold, saying, "Cooling inflation could significantly boost Bitcoin prices."

Analysts believe Bitcoin's sustained rally depends heavily on U.S. President-elect Donald Trump delivering on his campaign promises to create a crypto-friendly regulatory environment. Trump, set to take office on Jan. 20, has pledged to appoint pro-crypto leaders to key regulatory positions and make the U.S. "the world’s crypto capital."

John Glover, CIO at Ledn, emphasized, "The Bitcoin market is optimistic about potential rate cuts, but further price action hinges on Trump’s crypto policy moves."

Bitcoin’s (BTC)  spot price has experienced a 10% drop from its December high of $106,000, reflecting macroeconomic concerns and inflation fears. However, signs point to a potential relief rally:

With Trump’s inauguration approaching and Bitcoin futures showing upward momentum, analysts suggest the cryptocurrency may reclaim higher levels, potentially breaking past $100,000 in the near term. However, volatility is expected to persist until clear policy signals emerge from the new administration, according to Cointelegraph.