Bitcoin briefly surged above $89,000 following softer-than-expected U.S. inflation data on December 18, 2025, but quickly reversed course amid skepticism about the figures. The cryptocurrency settled around $86,000, down 0.8% in 24 hours, as the broader crypto market dropped over 2% to $2.97 trillion. Altcoins like XRP and Ethereum also fell, with $550 million in liquidations triggered.
On Thursday, December 18, 2025, U.S. markets reacted to the November Consumer Price Index (CPI) report, which showed headline inflation falling to 2.7% from 3% previously, cooler than forecasted. This initially sparked optimism for looser Federal Reserve policy, pushing Bitcoin above $89,300 during early U.S. trading hours. However, the rally faded rapidly over a couple of hours, with Bitcoin slumping to $85,500 before stabilizing at $86,000 by press time.
Skeptics quickly questioned the data's reliability. Economist Omair Sharif noted, "Major issue was zeroing out rent/owner's equivalent rent (OER) in October," warning it would artificially lower year-over-year CPI until April unless adjusted by the Bureau of Labor Statistics (BLS). Wall Street Journal reporter Nick Timiraos called it "totally inexcusable," adding, "The BLS just assumed rent/OER were zero for October ... There is just no world in which this was a good idea."
Markets echoed this doubt, with odds of a January Fed rate cut holding steady at 24%. The total crypto market value dipped to $2.97 trillion, down more than 2% in 24 hours. Bitcoin traded near $88,100 at one point but closed lower, while Ethereum fell to around $2,940 (down over 2%) and XRP to $1.90 (down 4%), failing to hold $2.00 resistance. XRP specifically declined 1.2% to $1.84 amid elevated volume up 147% above average, suggesting distribution by large players rather than panic.
Altcoins bore the brunt, with Solana dropping below $120—its weakest since April—alongside sharp falls in SUI, Dogecoin, and Cardano (ADA). This triggered $550 million in derivatives liquidations, though analysts described it as orderly deleveraging. Equity markets outperformed, with the Nasdaq up 1.7% despite pulling back from highs.
Positive macro signals, including core CPI at 2.6% and a 25 basis point Bank of England rate cut, failed to sustain crypto gains. Investors remained cautious, citing profit-taking, ETF-related pressures, and volatility. Bitcoin options indicated a range-bound outlook, with support below $85,000 and caps above $100,000, while Ether showed hedging around $2,700-$2,800.
For XRP, support levels are at $1.84, $1.73, and $1.64, with resistance at $1.93-$2.00. The session's wide $0.10 range (5.4% volatility) highlighted ongoing pressure, as crypto lagged broader risk assets in a familiar pattern of unsustained rallies.
