Bitcoin price recovers to $65K influenced by macroeconomic trends and the rise in tech stocks

Draft Title: "Bitcoin, Will the Upward Trend Continue After Breaking the Major Resistance Line: Focus on Institutional Demand and Economic Trends"

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The current Bitcoin price has once again risen above a critical resistance level, so let's find out whether there are enough upward catalysts to sustain the current rally.

On the early morning of September 26, Bitcoin's price fell to $62,705, causing a brief period of disappointment as the bulls (buyers) failed for the third time in four days to surpass the $64,000 resistance level. However, the sentiment changed with the opening of the U.S. stock market, and the S&P 500 hit an all-time high. Consequently, Bitcoin recovered to $65,000, climbing more than 3%.

Some market analysts believe that macroeconomic trends, such as the U.S. interest rate cuts and the reactivation of long-term institutional investors, have reinforced Bitcoin's path to reaching $70,000. Evidently, fears about a stock market bubble are diminishing, based on signals of robust economic growth and the U.S. hitting an all-time high in housing prices.

The rally in tech stocks and changes in monetary policy have significantly influenced investor sentiment. The technology sector is acting as a primary driver of the global stock market's rise, with companies like Alibaba, Tesla, Nvidia, Taiwan Semiconductor, and Apple recording gains of over 30% in the past six months.

Michael Matousek, Head Trader at US Global Investors Inc., told Bloomberg: “While AI (artificial intelligence) remains in the spotlight, people seem a bit overly excited about what we can expect in the near future.”

On September 24, investment researcher Lyn Alden emphasized that Bitcoin is the asset most closely correlated with changes in the global money supply (M2). Historically, when liquidity is added to bank deposits and circulating currency, Bitcoin’s price has a probability of rising 83% over 12 months. In contrast, gold has followed the direction of M2 with a 68% probability over the past decade.

This data is favorable for Bitcoin, especially as governments begin to implement fiscal expansion policies after 18 months of a hiatus, positively impacting the stock market as well. The S&P 500 index, according to the same study, shows an 81% correlation with changes in the money supply. Therefore, this cycle could further solidify Bitcoin's position as a hedge against government’s limitless money printing policies.

On September 26, the positive momentum in the U.S. stock market was mainly driven by the memory chip supplier Micron, a key player in the AI supply chain. Micron revised its quarterly revenue outlook upward from $8.5 billion to $8.9 billion. Predicting that the demand for chips used in AI data centers will increase fivefold by 2025, the company provided investors with a certain level of reassurance.

Additionally, the U.S. second-quarter GDP growth rate is estimated to be 3% for the third time, increasing investors' risk appetite. This supports a 3% annualized growth rate expectancy for the third quarter. The announcement of new economic stimulus measures in China also led to the CSI 300 index's largest weekly surge in a decade.

A recent development that significantly impacted Bitcoin's momentum is the $242 million inflow into spot Bitcoin ETFs over just two days. In contrast to BlackRock's iShares Bitcoin Trust ETF, which had only $5 million of inflows since its launch on August 27, this indicates a gradual increase in institutional demand.

The rise of Bitcoin above $65,000 is driven by macroeconomic trends, increased institutional demand, and the strength of the tech sector. The substantial inflow into Bitcoin ETFs signifies a shift in investor sentiment, potentially facilitating Bitcoin's rally towards $70,000.

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