BTC tumbles to $86,000, wiping out recent CPI gains and disappointing bulls

Crypto Markets Reversals Follow Softer U.S. Inflation Data

Crypto markets rallied early Thursday after weaker-than-expected U.S. inflation data, only to reverse sharply within hours. Bitcoin (BTC) climbed to $89,300 before dropping to $85,500, and was trading around $86,000 at press time, down 0.8% over 24 hours. The Nasdaq also gave up gains, falling roughly 2% from session highs but still up 1.7% overall.

The November Consumer Price Index showed headline inflation cooling to 2.7% from 3% in October. This initially fueled speculation that the Federal Reserve could cut rates in January—a move typically favorable for risk assets like crypto.

Skeptics, however, questioned the reliability of the CPI print. Economist Omair Sharif noted that the BLS zeroed out rent and owner’s equivalent rent (OER) in October, potentially depressing year-over-year CPI readings through April. WSJ reporter Nick Timiraos called the approach “totally inexcusable.”

Reflecting these doubts, market expectations for a January rate cut remain muted at about 24%.

BTC Rangebound, Ether Sees Hedging Activity

Options data show diverging sentiment between Bitcoin and ether (ETH $2,981.53). Bitcoin traders are selling downside protection below $85,000 while capping upside exposure above $100,000, signaling confidence in near-term support but limited expectation for a breakout, according to Wintermute’s OTC desk.

Ether options, in contrast, show more hedging. Support appears around $2,700–$2,800, but upside calls above $3,100 are being sold aggressively, suggesting traders are prioritizing protection over upside bets.