Bitcoin (BTC) witnessed a rebound on Wednesday, reaching and testing the $100,000 mark following a report of lower-than-expected U.S inflation numbers. This positive news had a ripple effect on the entire cryptocurrency market. The CPI (Consumer Price Index) figures came in at 3.2% year-on-year, slightly below the 3.3% projected by experts.
The release of these inflation figures eased concerns about rising inflation and a potential rate cut by the Federal Reserve, which had previously caused market turmoil and pushed BTC below $90,000.
It is worth noting that there is still a strong likelihood, at 97%, of the Federal Reserve maintaining its interest rates unchanged in the upcoming meeting towards the end of January.
Artificial Intelligence Drives Market Recovery; XRP Achieves Record High
Following the surge in BTC prices, Solana (SOL) and Ethereum (ETH) recorded gains of 14% and 12% respectively. However, the AI-driven sector witnessed even more significant gains, with Virtuals Protocol (VIRTUAL) and Aixbt (AIXBT) surging by 25% and 35% respectively.
Other tokens associated with AI technologies, such as Fartcoin and Cookie, also experienced double-digit increases. Interestingly, some AI-related tokens even saw triple-digit growth in just one day.
However, the standout performer in the market was XRP, which reached a new peak of $3.38, surpassing its previous peak from 2021. This surge resulted in a remarkable gain of over 40%, despite ongoing legal battles with the SEC over its classification.
The SEC recently appealed against a ruling that deemed XRP as a non-security asset, thereby reducing Ripple Labs’ penalty from $2 billion to $125 million. The agency’s decision to appeal has caused some unrest within Ripple’s leadership, who criticized the move as wasteful. Nonetheless, there are speculations that the new administration under President Trump may halt some ongoing crypto-related litigations, including the case involving Ripple.
Furthermore, the leading player in the Real-Asset Tokenization (RWA) market, ONDO, is set to release approximately 800 million tokens valued at $2.4 billion on 18th January.
This move could represent 134% of the token’s market capitalization and might expose it to substantial volatility and selling pressure. Despite the general market recovery, ONDO is already down by 42% and is currently priced at $1.2, struggling to recover from the sell-off experienced in December.
Looking ahead, the upcoming week will mark the inauguration of Donald Trump as President and could signal a new era for the cryptocurrency industry.
QCP Capital, a trading firm, noted an increased interest from options traders targeting prices between $100,000 and $110,000 as they anticipate potential market movements during this transitional period. In their statement,
“The BTC JAN options market was dominated by calls yesterday, reflecting a growing bullish sentiment among traders, with contracts ranging from $100K to $110K. This optimistic outlook bodes well as we move closer to March, where the highest open interest is currently observed at the $120K strike price.”