Bitcoin has risen back above $120,000, having fallen below last week, to just above $114,000 in the middle of the week. This rebound is attributed to new crypto legislation enacted in the U.S., which is motivating more investors, especially large ones, to head back into the market.
Bitcoin paused after a robust 7-day rally, as the traders took some money off the table. However, it is currently resting again above 120K, which depicts that people still have faith in the crypto market. Trading firm QCP Capital believes that the recent decline on Monday was only a breather as the market continues to rally. Ever since, Bitcoin has been exchanging hands in a very narrow range, with investors unwilling to make any decisions on the direction the market is taking.
U.S. shares, which have tracked Bitcoin all year to the dollar, have slackened lately too. The S&P 500 is a case in point as it has only increased by 0.6 percent in five days. This can be an indication of a relaxing trend in the crypto and conventional markets.
Regardless of the existing uncertainties in the world, including inflation, great tariffs, and political instability, Bitcoin keeps catching attention.
Institutional Interest Is Returning
One of the main reasons why Bitcoin is recovering is the recent effort of the U.S lawmakers to at least show better rules governing the crypto market. The House of Representatives passed the GENIUS Act last week, a bill aiming to establish protections for crypto users and stablecoins.
James Toledano, the Chief Operating Officer of Unity Wallet, says the move is promising. He asserted that the U.S government is now taking crypto seriously. Though we are yet to have final results, it helps in having clearer rules, hence providing more assurance to the investors. And money into the market comes with confidence.” Professionals note that the recent rally is reinforced by the following major trends:
- Business: Businesses are listing Bitcoin and other such cryptocurrencies as Ethereum and Solana, in their balance sheets.
- Stablecoin activity: The stablecoins (cryptocurrency that is dollar-like) are revealing progressive flows, which is an indication of healthy market activity.
- ETF investments: Larger funds are entering crypto-related funds, indicating the entry by larger players.
Vincent Liu, the Chief Investment Officer at Kronos Research, agrees that the rally of Bitcoin is due to the help of new liquidity, robust treasury excitement, and an older crypto accepted.
But Liu also cautions that future economic reports (such as the U.S. jobless claims, due on July 24) might put things in this sentimental notice. In case the number of jobs is better than anticipated, the fear of further interest rate increments may work against the Bitcoin movement.
Looking Ahead
There are no universal views on the short-term results, but most pundits are convinced that Bitcoin should stay solid. Ryan Yoon, a Senior Analyst at Tiger Research, claims that although short-term traders are taking profits, the supply and demand cycles are still much in favour of long-term growth.
Another reason that he mentions is the increased number of companies that have gradually started using Bitcoin as a treasury to manage their assets. That pattern has been in effect since the early half of 2024, yet it seems to have only risen in the past few months.
Yoon also notes that there are threats such as the high-inflation rate, limited possibility of interest rate reduction, and the increasing political tension in the U.S.
