Bitcoin rose slightly on Tuesday, extending its tepid performance from last week as traders remained sidelined by recent trade tariffs from U.S. President Donald Trump, and upcoming crucial inflation data.
The world’s largest cryptocurrency rose 1.3% to $98,435.5 by 01:54 ET (6:54 GMT).
Bitcoin has continuously moved in narrow ranges since last week, when fears of a global trade war deepened after retaliatory tariffs from China, followed by Trump’s levies on all steel, and aluminum exports.
Markets were also consumer price index inflation data, due on Wednesday, to gauge the Federal Reserve’s rate outlook, especially after it turned hawkish in December.
These factors have largely countered the optimism around friendlier crypto regulations under Trump administration- expectations of which had pushed Bitcoin to a record high above the $108,000 level.
Fed expected to keep rates higher for longer
A recent Reuters poll indicated that the Federal Reserve is likely to postpone additional interest rate cuts until the next quarter, largely due to concerns about inflation rising as a result of recent tariff policies.
Economists who had earlier predicted a rate cut in March have now adjusted their forecasts, signaling that the Fed may take a more cautious stance in response to possible inflationary pressures, the poll found.
Higher interest rates in the U.S. can negatively affect cryptocurrencies by reducing investor appetite for riskier assets, increasing the opportunity cost of holding non-yielding assets like Bitcoin, and strengthening the U.S. dollar, which often pressures crypto markets.
When interest rates are higher, borrowing costs increase, leading to a slowdown in economic activity and a shift of capital from speculative assets like cryptocurrencies to safer, yield-generating options such as bonds and money market funds.
This reduces liquidity in the crypto market, making it harder for Bitcoin and other digital assets to sustain price rallies.
Historically, Bitcoin has performed best in low-rate environments where excess liquidity fuels speculative trading.
However, if inflation cools and the Fed signals a pause or rate cuts, crypto markets could see renewed investor interest.
Crypto price today: altcoins jump, led by a surge in Cardano, Polygon
Most altcoins were also slightly higher, in line with Bitcoin’s movement.
World no.2 crypto Ether added 3.3% to $2,718.99 on Tuesday.
World no. 3 crypto XRP rose 4.4% to $2.5113.
Solana gained 1.1% and Polygon traded 7% higher, while Cardano surged 15.5%.
Among meme tokens, Dogecoin edged jumped 7.1%, while $TRUMP rose 6.8%.
