Bitcoin (BTC) briefly surpassed $68,000 on October 16, its highest since August, but maintaining that level was more difficult than expected. With the Bitcoin price currently trading below $67,500, the most important question is whether BTC price can regain its bullish momentum.
While stronger-than-expected economic data from the U.S. has reduced investor appetite for alternative hedging vehicles, TSMC’s strong earnings report shifts traders’ attention to the stock market.
While the macroeconomic environment played a significant role in Bitcoin’s rejection of $68,000, one incident in particular in the cryptocurrency industry has sparked expectations that the current Biden-Harris administration will show a more benevolent attitude toward cryptocurrencies. .
Will a strong US economy have a negative impact on the Bitcoin price?
The U.S. Department of Labor reported Oct. 17 that unemployment claims fell by 19,000 for the week ending Oct. 12. This data is used as an indicator of corporate layoffs and indicates that the economy remains relatively strong. Additionally, the U.S. Department of Commerce’s Census Bureau announced that retail sales in August increased 0.4% compared to the previous month.
“Consumer spending, net employment and wage income are locked in a resilient, self-reinforcing virtuous cycle during this expansion,” Jonathan Millar, chief U.S. economist at Barclays, told Yahoo Finance. Increased spending is generally seen as having a positive impact on corporate profits, which favors the stock market over Bitcoin.
S&P500 (left) and Bitcoin/USD (right). Source: TradingView
The S&P 500 gains on October 17 were led by Nvidia (NVDA), whose stock rose 3% to a new all-time high. The move comes as a benefit for Taiwan Semiconductor (TSMC), a major AI chip supplier. TSMC reported strong third-quarter results and raised its 2024 revenue outlook. TSMC stock price soared 13%, capturing investors’ attention and capital.
Whether you believe Bitcoin competes directly with technology stocks or not, part of Bitcoin’s value is derived from risky trading as investors seek returns in sectors that typically benefit from increased market liquidity. This effect has been further strengthened as Bitcoin spot exchange-traded funds (ETFs) now have assets under management exceeding $50 billion.
relevant: The U.S. lags behind the rest of the world in stablecoin adoption — Chainalytic
Bitcoin’s momentum could change if Ripple wins in court
A major event in the cryptocurrency market that could signal a more favorable regulatory stance from the Biden administration would be Ripple’s court victory. Analysts suggest that the U.S. Securities and Exchange Commission (SEC) may have missed the deadline to file an appeal brief in the Ripple case, and that if the SEC fails to file a brief, Ripple may seek a favorable resolution.
The SEC alleges that Ripple violated federal securities laws by offering unregistered securities by selling XRP (XRP) tokens. However, other analysts claim that the SEC filed its notice of appeal on October 2 and set the briefing deadline for October 18.
On the one hand, stronger-than-expected macroeconomic data is detrimental to Bitcoin’s near-term price. On the other hand, if the SEC loses traction in Ripple’s lawsuit, investors are likely to view this as a positive sign, potentially sparking new bullish momentum.
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.