[Market] Bitcoin tops $96,000 for the first time in two months…short-covering demand grows as inflation steadies

Bitcoin posted its highest level in two months, supported by signs of stabilizing U.S. inflation data and a wave of short-liquidations.

According to a report by Decrypt on the 14th (local time), Bitcoin rose about 4.5% on the day to trade around $95,500, marking its highest level since mid-November last year. During the rally, roughly $587 million worth of short positions were liquidated across the broader digital-asset market, including about $292 million in Bitcoin-related liquidations.

The move coincided with the release of the U.S. December Consumer Price Index (CPI). Headline CPI rose 2.7% year on year, matching market expectations, while core CPI came in at 2.6%. Monthly increases also remained contained, keeping the dollar and U.S. Treasury yields relatively steady.

The inflation data reinforced expectations that the Federal Reserve (Fed) is likely to keep its policy rate unchanged in the near term. Markets continue to leave room for the possibility of rate cuts in the second half of 2026. U.S. President Donald Trump again cited the inflation figures in reiterating the need for an accommodative monetary policy.

Traditional financial markets were mixed. Financial shares weakened and dragged on the Dow, weighed by disappointing results at JPMorgan Chase, while the S&P 500 and the Nasdaq showed limited moves near recent highs. Bank earnings appear to be setting the tone early in this earnings season.

Some analysts say shifts in the macro backdrop directly influenced Bitcoin’s price action. Ryan Rasmussen, head of research at Bitwise, said recent global currency instability and policy risks have rekindled investors’ focus on Bitcoin.

After trading in a range for the past several weeks, Bitcoin turned higher this week. The market is also watching the risk of increased volatility if changes in global liquidity and monetary-policy expectations persist.