Bitcoin Hits Two-Month High as CPI Steadies and Short Covering Accelerates

In brief

• Roughly $587 million in crypto short positions were liquidated as Bitcoin’s price pushed to its strongest level since mid-November.
• December’s CPI showed inflation holding at 2.7% year over year, with modest monthly gains keeping Treasury yields and the dollar relatively stable.
• U.S. equities sent mixed signals early in earnings season, with bank stocks weighing on the Dow while the S&P 500 and Nasdaq hovered near recent highs.

“Bitcoin’s price appears closely tied to expectations around global liquidity,” Abra founder and CEO Bill Barhydt told Decrypt. “Markets anticipate a sharp expansion in the money supply this year, driven largely by increased government bond purchases, while retail stimulus around the midterm elections could provide an additional boost.”