Eurozone inflation data arrived this week, and the surprise was not small. The region's (Consumer Price Index) (CPI) showed a 0.2% month-over-month change in December, completely reversing the previous expectation of -0.3%.

This shift in European inflation sentiment significantly impacts crypto traders. When inflation rises, fiat currencies lose purchasing power, and historically this increases interest in uncorrelated assets like Bitcoin and Ethereum. On the other hand, higher inflation data tend to pressure central banks to maintain high interest rates, which can offset the short-term relative appreciation of cryptocurrencies.

Stay tuned for the European Central Bank's next moves—this type of economic data fuels significant market movements.