The price of Bitcoin plunged to $62,705 in the early morning of September 26, indicating that bulls temporarily lost hope after the market’s attempt to break through the $64,000 resistance level was rejected for the third time in just four days. However, as U.S. stocks opened on the 26th and the S&P 500 index hit a new high, the wind direction changed. Bitcoin soon followed up and rose to $65,341.92, an increase of more than 3%, recovering its loss of $65,000.

Some market analysts believe that macroeconomic trends strengthen the possibility of Bitcoin heading towards $70,000, including U.S. interest rate cuts and renewed interest in cryptocurrencies from long-term institutional investors. Basically, concerns about a market bubble have receded amid signs of strong U.S. economic growth and record U.S. home prices.

Technology stocks have been the main driver of global stock market gains, with several companies surging more than 30% in the past six months, including Alibaba, Tesla, Nvidia, TSMC and Apple.

Michael Matousek, chief trader at US Global Investors, told the media: "AI is still here, but I think people are a little too excited and a little over-hyped in terms of the short-term outlook."

Lyn Alden, investment researcher and founder of Lyn Alden Investment Strategy, said on September 24 that Bitcoin is the asset most correlated with changes in the supply of broad money M2 (M2). Historical data shows that over the past 12 months, when bank deposits and currency in circulation increased liquidity, Bitcoin prices rose 83% of the time. In comparison, gold has followed the M2 direction only 68% of the time over the past 10 years.

Bitcoin/USD versus global M2 supply (megabytes). Source: BGeometrics

This data is good for Bitcoin and could also be a boon for stocks. According to the same study, the S&P 500 has an 81% correlation with M2. Therefore, this cycle may further solidify Bitcoin as a safe haven against government policies to print money.

The favorable momentum for the rise in U.S. stocks on the 26th mainly came from memory chip supplier Micron. Micron raised its revenue forecast for this quarter to $8.9 billion from $8.5 billion and predicted that demand for chips used in AI data centers will increase fivefold by 2025, providing investors with confidence.

Another major factor boosting investors' risk appetite is the 3% growth rate of U.S. gross domestic product (GDP) in the second quarter, which supports expectations for an annualized growth rate of 2.9% in the third quarter. Separately, China announced new economic stimulus measures, spurring its biggest weekly gain in more than a decade on the CSI 300 stock index.

However, the most important recent development affecting Bitcoin’s momentum was the $242 million inflow into a Bitcoin spot ETF in just two days. Previously, investors had been skeptical about whether institutional demand could be sustained, especially since BlackRock's iShares Bitcoin Trust ETF launched on August 27 and has seen only $5 million in inflows, according to data from Farside Investors.

Bitcoin's push past the $65,000 mark was driven by favorable macroeconomic trends, increased institutional demand and renewed investor confidence in the technology sector. Robust inflows into Bitcoin ETFs highlight a shift in investor sentiment and reduced perceived risk, potentially paving the way for Bitcoin to rise to $70,000.

10x Research also stated in the latest report that since the US Federal Reserve cut interest rates in September, Bitcoin has risen by 5%, Ethereum has soared by 11%, and altcoins have also followed the market in explosive growth. 10x Research further predicts that Bitcoin has a target price of $70,000 in the next two weeks and is expected to hit a record high before the end of October.

〈Bitcoin finally regains $65,000, could it hit the $70,000 mark? 〉This article was first published in "Block Guest".