On Thursday, Bitcoin traded around $64,830, reflecting a 0.8% increase over the past 24 hours and a 1.3% rise for the week, according to CoinDesk data. Ether experienced a 2.1% uptick, but most other major cryptocurrencies showed little movement, suggesting a market that is more cautious than actively rallying.
The upward momentum for Bitcoin is largely driven by macroeconomic optimism rather than a surge in cryptocurrency demand. President Donald Trump highlighted positive employment figures, improved manufacturing statistics, and easing inflation while suggesting the possibility of reopening the Strait of Hormuz.
Such a reopening could potentially drive oil prices down, alleviating inflation concerns and allowing Treasury yields and the dollar to decrease. This scenario is favorable for risk assets, and Bitcoin appears to be responding as if such developments might occur.
However, this trade relies on multiple factors aligning correctly. Lower oil prices need to translate into reduced inflation expectations, which in turn should lead to declines in real yields and the dollar.
Additionally, Bitcoin's roughly 63% correlation with the S&P 500 indicates that stock market sentiment could be more influential than crypto-specific flows in the short term. A more stable situation in the Middle East may boost risk appetite but could also diminish the haven appeal that supported Bitcoin earlier this summer.
Key indicators to monitor include real yields and the dollar's performance. Should both decrease alongside oil prices, Bitcoin could more easily surpass its recent trading range. Conversely, if yields remain high, the macroeconomic outlook will remain speculative, and Bitcoin is likely to hover around $65,000.