Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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TLDR:

• Inflation data in line; Core MoM softened to 0.2%, a minor positive for risk.
• Bonds hint at cuts; Yields dipped, rate cuts likely later in 2026.
• BTC flat; Range: $94k–$95k test, breakout opens $98k–$100k.

Inflation Data

• Core Inflation MoM: Forecast 0.3%, Actual 0.2%
• Core Inflation YoY: Forecast 2.7%, Actual 2.6%
• Inflation Rate MoM: Forecast 0.3%, Actual 0.3%
• Inflation Rate YoY: Forecast 2.7%, Actual 2.7%

The data comes in unchanged on a YoY basis which was mostly expected, although Core MoM moves down to 0.2%, from 0.3%. This is a positive print for markets, the Fed and the Trump administration. Inflation is trending lower, particularly the Core measure as we can see below.

What This Means?

With inflation coming in unchanged at 2.7%, we are seeing a move closer to the Fed's 2.0% mandated target, despite the progress being slow. Alongside this, the labour market is showing a relatively low Unemployment Rate, so there isn't pressure there for the Fed to lower rates immediately. But, should we see the inflation data continue to trend lower, then we'd expect the Fed to deliver several cuts this year at a minimum, and this data supports that. But, as mentioned, we expect the Fed to remain on pause for at least the next 1-2 Meetings (late-January and mid-March). This inflation print today doesn't change that, despite it being a positive print.

Market Reaction:

Going into the print, Crypto was up slightly (BTC up 0.80% one hour before the print), and with inflation coming in at 2.7%, this helps towards the possibility of future rate cuts in Q2 and Q3 2026. So, we'd have expected to see a risk-on rally off the back of this print, however BTC has mostly remained flat. But, it's possible we see more supportive price action in the US trading session.

In TradFi, we have seen a slight reaction with Bond Yields down a touch, particularly the US2Y Yield (down 2bps). This confirms our view that the market is pricing in a greater likelihood of future rate cuts off the back of this inflation print.

Our View?

We expect risk assets to continue moving higher here, and we're therefore of the view that BTC can retest the $94k-$95k area in the immediate term. Beyond this? We'll have to see how the metrics look once/if price reaches that $94k-$95k resistance level.

• Positioning: ETF's remain neutral but Long-Term Holder selling has substantially diminished. This may aid a relief rally to the $94k-$95k resistance area.

• For traders: Traders can play a move from $91,900 into $95,000, and hope for more should the metrics turn increasingly supportive should price retest $95k. Should the $95k resistance be broken, then price can get to $98k quickly, with $100k being the target.

Cryptonary’s Take:

Inflation comes in unchanged on the Headline number, with Core coming in slightly softer. This is positive for risk assets as it supports the view that inflation is coming down and therefore the Fed can cut interest rates further in 2026. However, the Fed has cut rates at each of their last 3 Meetings and members have therefore advocated for a 'pause' in the immediate term. This likely rules out rate cuts at the late-January and mid-March Fed Meetings, however the data is supportive of future cuts which aids the backdrop for risk assets to move higher - even if rate cuts aren't delivered in the immediate term.

As a result, our view is that BTC can retest the $94k-$95k horizontal resistance level this week. Should price get there, we'll closely assess other metrics to gauge whether BTC can make a breakout of $95k and push onto the next resistance range between $98k-$100k.

For the more passive of you, it's fine to be patient and wait here for confirmation of a breakout (above $95k) or a breakdown (below $89k). Traders; a Long from $92k to $95k can be played.

Cryptonary, OUT!