Key Factors Contributing To Bitcoin's Price Increase Today

Bitcoin's price is up today, driven by a rebound in the US job market, significant spot Bitcoin ETF inflows, and strong earnings reports from the tech sector.

Source: criptotendencia.com

Between Oct. 23 and Oct. 24, Bitcoin saw a 4% increase after retesting the $65,200 level. This rise is primarily linked to a reversal of outflows in spot Bitcoin ETFs from the previous day. However, broader macroeconomic factors, such as a tech stock rally and improving investor sentiment, also played a significant role.

Concerns arose on Oct. 22 when US spot Bitcoin ETFs experienced $79 million in net outflows, coinciding with the US Dollar Index (DXY) reaching its highest point in three months. This suggested a shift towards cash for safety, especially as weak US real estate data heightened fears of an economic slowdown. Mortgage applications fell to their lowest level since August, primarily due to rising borrowing costs, indicating prolonged sluggish demand in the housing market. Despite this uncertainty, confidence returned on Oct. 23 with $192 million in spot Bitcoin ETF inflows, largely driven by a leading asset management firm, while other ETFs experienced significant outflows. Additionally, strong earnings reports and positive US job market data have reduced investor caution, fueling further interest in Bitcoin.

Optimism Fueled By US Job Market Data And Tech Stocks Rally

In the week ending Oct. 19, new unemployment aid applications in the US dropped by 15,000, according to the Labor Department. At the same time, continuing claims for those receiving benefits beyond their initial week, which is seen as a proxy for hiring, rose by 28,000. These continuing claims indicate a stronger job market, potentially paving the way for future interest rate cuts from the Federal Reserve.

Optimism in traditional markets also grew due to strong performance in the tech sector. SK Hynix, NVidia’s memory chip supplier, reported record quarterly profits, driven by high demand from the generative AI sector, according to CNBC. Tesla’s stock surged by 17% after CEO Elon Musk announced that the company’s revenue could grow by up to 30% in 2025. Tesla’s earnings came in at $0.72 per share, beating Bloomberg’s estimate of $0.60. Additionally, its energy generation and storage segment hit a record gross margin of 30.5%, further boosting investor confidence.

Bitcoin's Strong Correlation With The Tech Sector

Some might argue that Bitcoin's price drivers are distinct from those of the stock market, especially tech stocks. However, the 50-day correlation between Bitcoin and the stock market has stayed above 80% throughout October, showing a strong connection. While this correlation can shift between positive and negative phases, Bitcoin and tech stocks tend to move together when common factors like market liquidity or recession fears align. Though spot Bitcoin ETF inflows played a role, it seems the positive momentum from tech stocks and a robust job market were the key drivers behind Bitcoin's price gains on Oct. 24.

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