5 min readBitcoin is rising, gaining 1.2% over the past 24 hours to push above 88k after US inflation cooled by more than expected and the BoJ hiked interest rates.
BTC recovered from a low of 84.6k yesterday to 88.2k at the time of writing. However, the price remains below the 90k resistance level amid thin December liquidity, typical for this time of year, which has meant that any rallies have been short-lived with limited follow-through. Trading volumes remain subdued, supporting range-bound trading.
Altcoins are also pushing higher, with Ethereum up 3% and Solana up 1.2%. The total cryptocurrency market capitalization is rising 1.4% to $2.97 trillion.
US CPI cooled by more than forecast.
Bitcoin has received a boost from cooler-than-expected U.S. inflation data, which has strengthened expectations for Federal Reserve rate cuts. US CPI eased to 2.7% YoY in November, down from 3%, and core CPI eased to 2.6%.
The data reinforced market expectations that the Federal Reserve could cut rates further in 2026. The market is pricing in a 26% probability of a 25 bps rate cut in January. Lower interest rates typically support risk assets such as Bitcoin.
BoJ hiked rates to a 30-year high.
Meanwhile, the BoJ raised interest rates by 25 basis points to 0.75%, the highest level since 1995, in line with expectations and signaled its readiness to hike rates further by offering a slightly more optimistic view of growth and inflation.
However, BoJ Ueda provided few clues about how far the BoJ could raise rates or at what pace, suggesting the central bank was in no rush. This eased some concerns about the unwinding of the yen carry trade, which had weighed on BTC in the lead-up to the meeting.
SOL underperforms the broader market. Can it sustain a recovery?
Solana is trading 1.4% higher over the past 24 hours but is down more than 13% over the week, making it one of the worst-performing major altcoins. Furthermore, the price has fallen 32% since November, underperforming the broader altcoin market, which has declined 21%.
The price decline comes despite the recently approved Solana ETFs seeing strong uptake, recording $63.9 million in net inflows over the past week. This suggests that institutions are starting to accumulate Solana, potentially viewing it as a long-term investment. However, this upbeat news has been overshadowed by strong selling pressure in the spot market.
Given that the price has fallen despite rising institutional demand, the question here is what is needed to reestablish a sustained bullish recovery?
On-chain data shows the Solana activity has been declining since August, with weekly network fees falling to $4.5 million from $7 million just two months ago. Decentralised applications on Solana also experienced a 30% decline in revenue over the same period, dropping to $26 million per week.
Solana is unlikely to achieve improved performance and close the gap relative to the broader altcoin market without a clear reversal in on-chain activity. The prospect for sustained bullish momentum in SOL remains limited.
SOL technical analysis
SOL trades below its falling trendline and the 50 and 200 SMAs, with bears in control. The price recently broke below the 130 support, the 78.6% Fib retracement of the 95 low and 253 high, dropping to 116.
Sellers will look to extend the bearish move towards 100, the psychological level, and 95, the 2025 low.
Resistance is at 130, with a rise above this exposing the 50 SMA at 144, which also coincides with the December high. A rose above here brings 155, the 61.8% Fib retracement level ahead of the 200 SMA at 175.
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