Why is Bitcoin Up Today? BTC Breaks $66k, New All Time High Incoming? – Blockonomi

Bitcoin (BTC) experienced a significant rally on Wednesday, rising over 7.5% to reach $66,250, marking its best single-day performance since March 20.

This surge in price can be attributed to several factors, including weak U.S. economic data, a shift in central bank policies, and increased institutional interest in spot Bitcoin ETFs.

TLDR

Bitcoin (BTC) rose over 7.5% on Wednesday, its best performance since March 20, as weak U.S. economic data raised the probability of Fed rate cuts.
Central banks worldwide are pivoting toward monetary easing, which is a positive sign for risk assets, including cryptocurrencies.
Spot Bitcoin ETF inflows surged to a two-week high of $303 million on May 15 as institutional investors turned bullish following the U.S. CPI data release.
Major hedge funds like Millennium Management and Elliott Capital have disclosed significant stakes in various spot Bitcoin ETFs.
Analysts predict that Bitcoin could potentially target the $84,000 level, with veteran trader Peter Brandt suggesting a new all-time high based on the HSBDP indicator.

The U.S. Labor Department released data showing that the consumer price index (CPI) increased less than consensus estimates in April, signaling a downward shift in the cost of living.

Retail sales growth stalled, with the “control group” category declining 0.3% month-on-month.

These economic indicators have strengthened the case for a Fed rate cut in September, with markets expecting the Bank of England (BOE) and the European Central Bank (ECB) to follow suit in June.

As central banks worldwide pivot toward monetary easing, the net percentage of banks cutting rates is on the rise. This shift in policy is seen as a positive sign for risk assets, including cryptocurrencies, as it could help improve market liquidity.

Institutional investors have also shown renewed interest in Bitcoin, with spot Bitcoin ETF inflows surging to a two-week high of $303 million on May 15. Fidelity’s FBTC fund saw $131 million in inflows, while Bitwise’s BITB fund recorded an inflow of $86 million. Even Grayscale’s GBTC saw a return to inflows after four months of outflows.

SEC filings reveal that one of the world’s largest hedge funds, Millennium Management, holds a substantial $2 billion spot Bitcoin ETF portfolio, comprising stakes in various ETFs such as BlackRock’s IBIT, Fidelity’s FBTC, and Grayscale’s GBTC.

Other major hedge funds, like Elliott Capital and Apollo Management Holdings, have also disclosed significant stakes in spot Bitcoin ETFs.

The recent Bitcoin price rally has mirrored the performance of major global stock indexes, with the S&P 500 reaching a new all-time high.

Analysts believe that the rising traded volume for spot BTC ETFs demonstrates heightened demand from institutional investors, which has helped rejuvenate the bullish sentiment in the market.

As Bitcoin continues to gain momentum, analysts are setting their sights on potential price targets.

Some predict that Bitcoin could reach $84,000, while veteran trader Peter Brandt suggests that the cryptocurrency is on the verge of printing a new all-time high based on the hump, slump, bump, dump, pump (HSBDP) indicator.

I have shown this chart many times in the past in slightly different iterations and it remains my preferred interpretation $BTC pic.twitter.com/dr47wYBsw3
— Peter Brandt (@PeterLBrandt) May 15, 2024

As central banks continue to ease monetary policies and institutional investors increase their exposure to Bitcoin through spot ETFs, the stage appears to be set for another crack at the ATH in the coming months.