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Here is Why the Recent Bitcoin Surge Could Be Temporary

Here is Why the Recent Bitcoin Surge Could Be Temporary

CryptodnesCryptodnes2024/09/30 19:36
By:Cryptodnes

Bitcoin (BTC) reached a two-month peak on September 28, nearing the crucial $66,000 threshold.

This surge coincided with the SP 500 hitting an all-time high on September 26, driven by robust economic data.

Despite this upward trend, analysts caution that Bitcoin’s current position does not signify a lasting bull market. Investor wariness persists due to past struggles at the $70,000 level and ongoing recession fears that could impact risk-sensitive assets like cryptocurrencies.

While these concerns do not necessarily trigger a mass sell-off, they create an environment where bearish sentiments can thrive, curtailing Bitcoin’s potential for further gains. Additionally, gains in the stock market don’t guarantee similar increases for Bitcoin.

READ MORE:
MicroStrategy’s Bitcoin Bet Yields Explosive Return, Surpassing Crypto Gains

Some analysts point to central bank policies as indicators of economic instability but highlight that major tech firms, such as Google and Amazon, remain robust with solid profit margins and balance sheets. In contrast, Bitcoin’s underlying influences differ; historically, during times of recession anxiety, investors gravitate towards safer assets like gold or government bonds.

Recent data indicates a lack of retail interest in Bitcoin. On September 28, the Coinbase mobile app was ranked 385th, showing only minor improvement since mid-September despite Bitcoin’s 20% increase over three weeks. Furthermore, the Chinese stablecoin market exhibits bearish trends, with USDT trading below parity for two weeks.

In the Bitcoin futures market, institutional traders are adopting a cautious approach, with premiums stabilizing around 6%, indicating a lack of strong conviction. This volatility suggests that the recent price rally for BTC may not be sustainable.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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