BItcoin price fell again to $64,000. Here’s why:

Bitcoin (BTC) has failed to maintain levels above $66,000 since July 31, despite gaining 5.2% between October 3 and October 7. Some analysts argue that Bitcoin is benefiting from the ever-growing US federal debt. However, while these correlations appear to be valid, they have minimal impact on short-term price trends.

In reality, this is a key driver of limited Bitcoin upside given that the global monetary base (M2) expanded from $104 trillion in June to $108 trillion in October, while Bitcoin was rejected multiple times at the $68,000 resistance level. It appears to be. water level. This means that a rise to $64,000 is unlikely to be due to US financial conditions.

Additional evidence weakening this relationship is the strength of the US dollar relative to other major global currencies, as measured by the DXY index. The DXY index rose from 100.4 on September 30 to 102.5 on October 7. Why are investors cashing out euros, British pounds and Swiss francs when US government debt is spiraling out of control?

Recent US macro data has not been favorable to Bitcoin price.

To understand why the price of Bitcoin has not been able to consistently stay above $66,000 over the past eight weeks, we need to start by analyzing what factors are limiting the improvement in investor sentiment. For example, uncertainty about global economic growth, escalating conflicts in the Middle East, and the impact of the upcoming US presidential election in November are important factors.

The stronger-than-expected September U.S. employment data released on October 4 reduced the likelihood of a recession. But the implied probability of a 0.50% rate cut has fallen to 0% from 40% just two weeks ago, according to the CME FedWatch tool. Over the long term, high interest rates hurt the price of Bitcoin by making investors more risk-averse.

Moreover, global investment bank Goldman Sachs has raised its year-end 2025 S&P 500 index target to 6,300 as current macroeconomic data has investors growing expectations of positive third-quarter corporate earnings, according to Reuters. Goldman noted that a “recovery in the semiconductor industry cycle” would further support earnings momentum.

Regardless of Bitcoin bulls’ views on how the BTC price will react to a potential global recession, the recent stimulus announced by China has significantly reduced the need for alternative hedging. The Hong Kong stock market index hit a 32-month high on October 7, closing 9.3% higher than on September 30, while the S&P 500 index is trading 0.5% below its all-time high.

Bitcoin derivatives index and spot ETF outflow

Despite the overall strength in global stock markets, the price of Bitcoin has been unable to maintain levels above $66,000, and more importantly, the sentiment of derivatives traders remains neutral. Annual premiums in the monthly BTC futures market serve as a key measure of strength.

In neutral markets, these derivatives contracts typically trade at premiums of 5 to 10 percent per annum to compensate for their long settlement periods. However, as demand for leveraged purchases increases, this premium can easily exceed 15% or 20%. Conversely, bearish periods result in negative premiums, also known as backwardation.

The annual premium for BTC futures remains at 8%, suggesting leverage demand is relatively balanced between bulls and bears. Part of the lack of confidence among traders comes from recent flows in Bitcoin spot exchange-traded funds (ETFs), according to Farside Investors data. This represents a net outflow of $335 million since October 1.

Ultimately, the reason Bitcoin is stuck below $64,000 is largely due to the macroeconomic environment favoring stock markets and investors seeking protection in cash positions ahead of socio-political uncertainty.