The sharp pullback in stocks and cryptocurrencies may reduce the chances of Donald Trump’s inauguration being a “sell-the-news” event, K33 Research has suggested.

Bitcoin (BTC) rebounded on Tuesday, climbing to an intraday high of $97,300 after slipping below $90,000 during Monday’s selloff. The recovery was fueled by reports of pro-crypto measures being prepared by Trump’s incoming administration and by softer-than-expected U.S. Producer Price Index (PPI) data for December.

At the time of writing, BTC was trading near $96,500, marking a 3% gain in the past 24 hours. The CoinDesk 20 Index, which tracks the largest cryptocurrencies by market cap, outperformed with a 5% increase, led by 6%-7% gains in XRP and DOGE.

Traditional equities were relatively muted, with the S&P 500 and Nasdaq indices closing flat as traders digested recent economic data.

Bitcoin remains in a consolidation phase above $90,000, caught between a strengthening U.S. dollar and rising Treasury yields that have rattled global markets. Hawkish economic indicators have dampened market expectations for significant Federal Reserve rate cuts in 2025.

The focus now shifts to Wednesday’s Consumer Price Index (CPI) report, which could further clarify the inflationary outlook and the Fed’s next steps, introducing potential volatility across markets.

Trump’s Jan. 20 inauguration also looms large, with crypto traders eyeing potential market moves fueled by speculation of executive orders aimed at supporting the digital asset space.

K33 Research initially anticipated that the inauguration could prompt a “sell-the-news” reaction due to heightened expectations. However, the early-year selloff has prompted a reassessment.

“Earlier, we viewed the inauguration as a key moment for de-risking positions, but the recent downturn in markets makes this strategy less attractive unless we see a substantial recovery in the coming days,” K33 noted in its report.

“The S&P 500 wiped out its post-election gains, and bitcoin touched its lowest levels in two months,” the analysts wrote. “Any move to reduce exposure would now be highly dependent on near-term price action. That said, we remain optimistic about the long-term bullish implications of Trump’s pro-crypto policies.”