Bitcoin (CRYPTO: BTC) has experienced a significant movement in the last 24 hours, increasing by 2.6% since 4 p.m. ET yesterday (as of 1:30 p.m. ET). Similarly, Ethereum (CRYPTO: ETH) has surged 3.8%, while Dogecoin (CRYPTO: DOGE) has risen by 4.4% within the same timeframe.

These gains have pushed Bitcoin closer to the crucial $100,000 threshold, with the leading digital currency often fluctuating around this key figure. The impressive performances of Ethereum and Dogecoin can be understood within the broader context of market trends that typically influence these three major cryptocurrencies. Let’s explore what’s driving this strong momentum in the overall crypto market, and specifically for these three cryptocurrencies.

It’s a Macro Day, Indeed

Today’s discussions in traditional media and on social platforms are largely centered on the newly released Consumer Price Index (CPI) report, which showed a lower than anticipated result. Core CPI unexpectedly fell by one-tenth of one percent, resulting in increased interest from investors in high-growth and speculative assets.

However, it’s important to note that the overall inflation rate of 2.9% remains significantly above the Federal Reserve’s target. Concerns about potential tariff policies from Trump and the bond market’s future reactions to increasing deficits and growth over the next four years persist.

Nevertheless, the lower-than-expected core CPI has led the market to anticipate a higher likelihood of ongoing interest rate cuts. These perceived cuts are exerting pressure on the U.S. dollar, enhancing the risk-reward outlook for more speculative assets, which should benefit major cryptocurrencies like Bitcoin (which tends to be more aligned with currency fluctuations), Ethereum, and Dogecoin.

Are Animal Spirits Reviving?

On a day where there are few specific catalysts for individual tokens, general market sentiment linked to easing macro conditions can often create a positive momentum that uplifts the entire market. Given that cryptocurrencies represent some of the highest-risk assets for traditional investors, today’s substantial movements (surpassing those of most indexes) reflect this sentiment.

In addition to its influence on the U.S. dollar, the CPI report is likely to have positive implications for all risk assets due to a projected decline in long-term yields. The 10-year U.S. Treasury yield is typically considered a critical discount rate for equities and other risk assets. For those in the crypto space with a long-term investment strategy, assessing future growth requires a discount factor related to interest rates, particularly the focus on the bond yield at this moment.

If macroeconomic conditions continue to improve and investors begin to anticipate a more accommodating monetary policy, there is a possibility that market enthusiasm will resurface. Bitcoin, Ethereum, and Dogecoin are generally regarded as quality digital assets by their respective communities. Today’s CPI report might just be the catalyst they needed to regain upward momentum.

Chris MacDonald has holdings in Ethereum. The Motley Fool has investments in and recommends Bitcoin and Ethereum. The Motley Fool maintains a disclosure policy.

The Motley Fool is a content partner of YSL News, providing financial news, analysis, and commentary to help individuals take charge of their financial future. Its content is produced independently of YSL News.

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