Bitcoin Opens Strong on Tuesday: What’s Driving the Latest Rally?

Over the past five days, Bitcoin has surged approximately 13% to a high of $67,700 on Monday, Oct. 15, its highest level since July. This outpaced both the world stock index and gold during this period. The crypto market growth coincided with renewed capital inflow into U.S. Bitcoin-based exchange-traded funds (ETFs). On October 14, a group of spot ETFs received over $555 million, the largest amount since June. Spot ETFs, which involve actual cryptocurrency purchases and legal BTC trading, have driven Bitcoin's price growth in Q4.

US Elections Bring Positive Expectations For Crypto Traders

The BTC price could also be influenced by the positive regulatory sentiment following former President Donald Trump’s and Vice President Kamalla Harris’ crypto-friendly statements during US election debates.

Both US presidential candidates have expressed their favorable position on the digital asset market future, stimulating crypto businesses to invest billions of dollars in the election campaign. Although Trump is considered by the crypto market to be more loyal to cryptocurrencies, Harris has recently expressed positive sentiment by promising to support the industry.

The generally positive outlook from both candidates is positively influencing market expectations regarding the introduction of friendly regulations for the digital asset market, according to analyst Noel Acheson.

Political Factors and Regulations Are Not a Key Catalyst

However, Bitcoin’s growth may also be due to more fundamental factors that do not depend on the White House and politicians’ future decisions. Larry Fink, head of BlackRock (NYSE:BLK), claims that the growth of Bitcoin does not depend on expectations of positive regulation of the industry, nor on who will become the US president.

Fink said that the use of crypto assets and their global distribution are more important for the market's future. “I’m not sure that any president will be able to change anything. I really don't believe that this is a function of regulation", Fink wrote about the company's third-quarter earnings.

The head of BlackRock called cryptocurrency an independent asset class. In his opinion, the crypto market's future depends on liquidity and transparency rather than on regulation. He also compared the current crypto market to the emergence of the mortgage market, which also developed slowly, but grew as it developed.

The Path to $70,000 Remains Open

“Bitcoin's resistance despite increased volatility last week reflects investors' hopes for strengthening the US economy, with positive unemployment data hinting at a further easing of the Fed's monetary policy, which would likely benefit riskier assets like Bitcoin”, commented Ryan Lee, Chief Analyst at Bitget Research.

"Similar to the growth in U.S. stocks, the positive price movements in the crypto market are likely influenced by favorable economic data from China and the U.S., along with recovering investment demand. This strengthens forecasts for a potential future interest rate reduction by the Federal Reserve," commented Pauline Shangett, CMO at cryptocurrency exchange ChangeNOW.

First, traders' attention this week is focused on a new batch of quarterly reports from 43 US companies included in the S&P 500 index.

Second, the market is waiting for new signals from the Fed regarding further steps to reduce the interest rate. Fed Gov member Christopher Waller noted that the US economy is now “much stronger than previously thought” and “the labor market remains quite healthy,” which may influence the Fed's decisions.

Although Bitcoin’s price has seen a slight correction following its recent surge, Shangett believes that the path to $70,000 remains open. He notes, "The next resistance level could be at $73,000, and breaking through it may trigger significant buying, pushing BTC towards $80,000-$86,000."

Lee agrees: “On a technical pattern, indicators like a “golden cross” on the MACD, where the short-term moving average crosses above the long-term moving average, may signal a bullish trend. If this pattern continues, accompanied by a spike in trading volumes, we can see Bitcoin reaching or even exceeding the $70,000 mark”.