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Crypto markets ripped higher on Wednesday as easing U.S. inflation and renewed political uncertainty around the Federal Reserve reignited demand for scarce, non-sovereign assets.

Bitcoin (BTC) jumped more than 4% over the past 24 hours, breaking above $95,000 for the first time in a week and pushing toward the upper end of its January range. Ether outperformed, climbing over 7% to around $3,330, while major tokens, such as Solana's SOL, Cardano's ADA, xrp (XRP) and BNB Chain's BNB, moved as much as 9% higher.

The move came as U.S. inflation data surprised to the downside, reinforcing expectations that the Federal Reserve will continue cutting rates this year. Lower inflation eased pressure on bond yields and improved liquidity conditions, a setup that has historically favored crypto and other risk assets.

Political tension added fuel. Reports that the U.S. Justice Department had served grand jury subpoenas on the Federal Reserve earlier this week unsettled markets and weakened the dollar, boosting the appeal of assets viewed as insulated from central bank risk.

Bitcoin is now approaching levels that previously triggered heavy selling, and derivatives data shows leverage is quickly rebuilding. It means the market could see increased volatility.

Bears liquidated

The upside move came with significant wind ups in futures markets. More than $688 million in crypto derivatives positions were liquidated over the past day, according to Coinglass data, with short sellers accounting for roughly $603 million of the total.

Nearly 122,000 traders were wiped out as prices accelerated higher, led by a $12.9 million ETHUSDT liquidation on Binance.