MarketsAltcoinsBitcoinEthereum
|3 min ReadSofter CPI and US–China thaw spark risk rally
Jax Morales
Senior Analyst
Published
Jan 16, 2026
Risk appetite is back. Softer inflation and a friendlier Trump–Xi tone lifted markets, sending yields lower and the VIX toward 16 while the S&P 500 gained 1.9 percent. The catalyst was clean. A U.S. CPI print of 3.0 percent year over year versus 3.1 percent expected, plus news of a Trump–Xi summit in Seoul. Rate cut hopes firmed into this week’s FOMC, and the tape responded.
Bitcoin rose 5.3 percent, reclaiming 160 million short squeeze followed confirmation of a U.S. trade framework, one of the sharpest squeezes in weeks. Ethereum tracked higher toward $4,200. Gold faded nearly 7 percent from recent highs as money rotated out of defense and into risk.
Bitcoin reclaims $115k as DeFi and AI lead rotation
Flows are broadening beyond the majors. DeFi and AI names led on stronger protocol revenues and improving on-chain activity. Utilities and tooling caught a bid as new L2 deployments and restaking primitives drew liquidity. Perp funding turned positive across most large caps, a sign sidelined capital is stepping back in. Positioning is still far from crowded, which is healthy. Stablecoin supply ticked higher for the first time since September, a good tell that macro tailwinds are starting to translate into real inflows.
ETF demand remains the steady hand. U.S. spot BTC ETFs absorbed moderate inflows even as volumes thinned, underscoring sticky structural buying. Open interest in BTC and ETH perps is rebuilding at a measured pace after the early-month flush. Cleaner leverage. More balanced funding. A sturdier derivatives backdrop.
Setup into November looks constructive as headlines improve
Seasonality helps. Q4 has historically been Bitcoin’s strongest stretch, and the mix today looks supportive. Cooling inflation, stabilizing geopolitics, and a more dovish Fed path are easing the pressure. Positioning is cleaner. Volatility is calmer. Liquidity is improving. Capital is rotating back toward crypto with intent.
Markets are rotating back into risk as softer inflation and renewed U.S–China dialogue lift sentiment, cleaner positioning sets up a constructive path into November
On the ground, key headlines reinforce the shift. JPMorgan now lets institutional clients post BTC and ETH as collateral, a practical step toward broader integration. The Federal Reserve is studying payment accounts that could give crypto and fintech firms direct access to Fed rails. Coinbase expanded retail offerings with a 110 million investment in Berachain to build a crypto treasury for on-chain liquidity and governance. Meteora completed its TGE and launched Presale Vaults, Meteora Invent, and Dynamic Fee Sharing to boost capital efficiency. MegaETH Labs opened a public sale on Sonar/Echo starting at a $1 million FDV. Meanwhile, rising chatter around x402 Protocol, first introduced in May, is pushing the AI-agent narrative forward.
The tone is confident, the structure is improving, and the pipeline of catalysts is real. If macro stays friendly, November has room to run.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.