Categories: Bitcoin Latest News

Here Are The Major Drivers Behind The Bitcoin Price Recovery Above $42,000

Bitcoin recently surged above $42,000, having traded below $40,000 for several days. This market recovery is believed to be a result of different factors, including recent revelations about the US economy

Macroeconomic Factors That Contributed To The Recent Bitcoin Surge

The personal income expenditures (PCE) price index, a leading inflation indicator, was released on January 26 and reported to have been lower than expectations. This suggests that inflation in the United States is cooling off, and experts predict that the Federal Reserve will likely reduce their aggressive monetary policies. 

The Fed’s hawkish stance is known to have a negative effect on Bitcoin’s price and the broader crypto market. As such, this recent development is a positive one and is something that could have influenced investors to double down on their investments in the flagship cryptocurrency, thereby sparking a price surge. 

Meanwhile, data from the US Treasury recently showed that the country has hit an all-time debt of $34,1 trillion. While this has raised concerns about the looming crash of the US dollar, it has also presented Bitcoin and other cryptocurrencies as a haven to hedge against the potential devaluation of the nation’s currency. 

Interestingly, different financial analysts, including renowned economist Peter Schiff, have continued to predict the imminent crash of the US dollar. In light of this, finance author Robert Kiyosaki has urged everyone to invest in Bitcoin to avoid becoming poorer due to the government’s actions. 

Another factor believed to have contributed to Bitcoin’s recent surge is the expiration of monthly BTC options contracts on Deribit. The expiry outcome more than likely played a crucial role in Bitcoin’s rally, considering that CryptoQuant CEO Ki Young Ju had pinpointed the derivatives market as responsible for Bitcoin’s recent decline.  

GBTC’s Outflow Slows For The Fourth Consecutive Day

Grayscale’s GBTC saw an outflow of just $255.1 million on January 26, continuing a recent trend of reduced outflows from the fund. NewsBTC reported how the Bitcoin ETF had seen outflows of $515 million, $429 million, and $394 million on January 23, 24, and 25, respectively.

As noted by Bloomberg analyst James Seyffart, January 26 also happened to be the lowest outflow day for GBTC since converting to a Spot Bitcoin ETF. This development suggests that the fund’s investors may be cooling off on taking profits. It is also significant because Grayscale has contributed to the selling pressure that has plagued Bitcoin of late. 

At the time of writing, Bitcoin is trading at around $41,700, up over 4% in the last 24 hours according to data from CoinMarketCap.

 

[#item_full_content]NewsBTCRead More
AddThis Website Tools

Recent Posts

Bitcoin’s Price Sees Drop as Altcoin Traders Face Increased Pressure

Bitcoin’s recent upward trajectory has encountered resistance after reaching a record-breaking peak of over $111,000…

4 hours ago

Panama Canal Could Prioritize Bitcoin-Paying Ships, Mayor Suggests

Panama City’s mayor, Mayer Mizrachi, put forward an unusual plan at the Bitcoin 2025 conference…

5 hours ago

Bitcoin Upward Momentum ‘Highly Likely’ To Continue, On-Chain Data Shows

Although Bitcoin (BTC) appears to have stalled in the mid-$100,000 range, on-chain data indicates that…

6 hours ago

Halfway To Clean: Bitcoin Hits 50% Renewable Mark, Ripple Chairman Reacts

Ripple’s chairman Chris Larsen praised the crypto network’s move toward greener energy this week. He…

7 hours ago

Bitcoin Will Soar, Altcoins Won’t—Charles Edwards Explains Why

In an interview with Korean crypto researcher Juhyuk Bak, also known as @JuhyukB, Capriole Investments…

8 hours ago

Crypto Bulls See $644M Bloodbath As Bitcoin Dips Below $105,000

Data shows a large number of long liquidations have occurred in the cryptocurrency market as…

9 hours ago