Bitcoin Roaring Back As AI Stocks Surge
BTC Bouncing Back
Bitcoin prices are pushing higher again today with the futures market up almost 2% on the day, now up almost 4% off the week’s lows. The move higher comes amidst a fresh surge in institutional demand as BTC ETFs post their fifth consecutive day of inflows. Total ETF inflows topped $727 million as of yesterday, making the biggest run of buying since early June before BTC reversed lower amidst a heavy run of outflows. In terms of what’s driving the shift in sentiment, it’s likely that the recent inflation miss in the US is playing a big part. Fed rate hike expectations cooled on the back of the weaker-than-forecast June number and players are aware that any further inflation undershoots could see that dynamic developing further. As such, what we’re seeing here is some pre-positioning with longer term bulls looking to establish positions early against the recent lows playing for a rebound higher if Fed tightening expectations drop more.
AI Stocks Rallying
Another driver we’re seeing currently is the rally in Asian semiconductor stocks (AI chips) which has been feeding into bullish sentiment for BTC. This has developed as a typical dynamic this year with BTC rallying or falling in line with chips. Part of this is due to the broader impact on risk sentiment with the AI trade becoming one of the themes of markets over the last year. As such, whenever AI stocks are rallying, risk assets in general tend to move higher. Looking ahead this week, we also have a slew of big tech names reporting which could help propel the rally further if earnings come in strong.
Technical Views
BTC
Price is now testing above the 65,380 level for the first time since mid-June with the 67,405 peak the next challenge for bulls ahead of the bigger 69,605 level. With momentum studies turning higher focus is on continued upside while price holds above 65,380.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.