Bitcoin rallied on Tuesday, rising along with other risk assets as traders digested a weak inflation reading.

According to Coin Metrics, the price of the flagship cryptocurrency rose 3% to $96,452.34 on Tuesday after falling below the $90,000 support level earlier in the week. The broader crypto market, as measured by the CoinDesk 20 index, gained 4%.

Shares of Coinbase And Microstrategy rose more than 1% and 4%, respectively, reducing previous gains.

The move comes as the Bureau of Labor Statistics reported weaker-than-expected inflation on Tuesday. The producer price index, which measures wholesale inflation, rose just 0.2% in December, while economists surveyed by Dow Jones had estimated a rise of 0.4%.

Crypto prices are caught in a tug-of-war between investor concerns about rising inflation under Donald Trump’s new administration and optimism about the president-elect’s crypto-friendly leadership, which could provide significant support to the industry this year. As a result, traders are expecting a busier-than-expected January that could extend throughout the quarter.

Bitcoin plunged last week after better-than-expected jobs numbers led to a rise in bond yields and prompted investors to dump growth-oriented risk assets. Headlines about Trump’s tariff plans also spooked investors and gave a boost to the dollar, which has an inverse relationship to Bitcoin.

Fundstrat’s Tom Lee told CNBC’s “Squawk Box” on Monday that Bitcoin could correct to $70,000 before hitting new records and ultimately ending the year between $200,000 and $250,000. Crypto traders are used to Bitcoin falling sharply during a bull market.

Bitcoin is 10% below its record set on December 17th. In 2025 it increased by 3%.