Bitcoin swings back above $97,000, in stunning reversal, as light inflation data stokes risk appetite

Bitcoin bounced on Tuesday, rising with other risk assets as traders digested a light inflation reading.

On Tuesday the price of the flagship cryptocurrency rose 4.5% to $97,044.35, according to Coin Metrics, after sliding below the $90,000 support level to start the week. The broader crypto market, as measured by the CoinDesk 20 index, added 3.9%.

Shares of Coinbase and MicroStrategy gained more than 3% and 5%, respectively. Mining stocks Mara Holdings and Core Scientific were up by roughly 5%.

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The move comes as the Bureau of Labor Statistics reported cooler-than-expected inflation Tuesday. The producer price index, which measures wholesale inflation, increased just 0.2% in December, while economists polled by Dow Jones had estimated a 0.4% rise.

Crypto prices are stuck in a tug of war between investors’ concerns about rising inflation under the incoming administration of Donald Trump and optimism over the president-elect’s pro crypto leadership, which could meaningfully support the industry this year. As a result, traders are expecting a choppier-than-anticipated January, which could extend through the full quarter.

Bitcoin tumbled last week after stronger-than-expected payroll numbers caused a spike in bond yields, prompting investors to dump growth-oriented risk assets. Headlines about Trump’s tariff plans also spooked investors, giving a boost to the dollar, which has an inverse relationship with bitcoin.

Fundstrat’s Tom Lee told CNBC’s “Squawk Box” Monday that bitcoin could correct to $70,000 before breaking to new records and eventually end the year between $200,000 and $250,000. Crypto traders are accustomed to steep drawdowns in bitcoin during a bull market.

Bitcoin is 10% off its Dec. 17 record. It’s up 3% in 2025.