Bitcoin (BTC) has surprised both investors and analysts with a sudden price increase, closing at a two-month peak on September 28, hovering near the $65,500 mark. This rise coincided with the S&P 500 index reaching an all-time high on September 26, reflecting a broader market uptrend.
Strong economic indicators and a series of measures aimed at boosting market confidence in China have contributed to the stock market’s upward trajectory. However, despite these positive signs, various metrics suggest that Bitcoin is far from entering a full-fledged bull market.
The recent rally in Bitcoin is overshadowed by investor skepticism, with many wary of a potential rejection around the $70,000 threshold. Concerns about an impending recession are also prompting caution among investors, who fear that such economic downturns could negatively impact risk-on markets, including cryptocurrencies.
While Bitcoin is perceived as a scarce and sovereign asset, its market drivers differ significantly from those of traditional stocks. Historically, during recessionary periods, investors have favored safe havens like gold, short-term government bonds, and market leaders in various sectors.
Recent data from the Coinbase mobile app reveals that despite Bitcoin’s 21% price increase over the past three weeks, retail interest in digital assets remains tepid. The app’s ranking improved from 482nd on September 14 to 385th on September 28, suggesting that there is still considerable room for growth in retail engagement.
Institutional investors appear to be the primary force behind Bitcoin’s recent price surge, as evidenced by increased inflows into spot exchange-traded funds. However, data from Chinese markets presents a contrasting narrative. To assess the appetite of investors in China, it is crucial to examine the demand for stablecoins. The premium on USD Tether (USDT) in China has been below parity for the past two weeks, indicating bearish sentiment among investors.
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