Bitcoin Struggles to Break US$65K Mark as Market Dynamics Signal Increased 'Appetite” for BTC

Bitcoin has been struggling to break through the US$65K (AU$95.8K) mark in the past weeks, twice peaking just below at US$64,791 (AU$95,577) and US$64,789 (AU$95,574).

Bitcoin has been attempting to break through the US$65K (AU$95.8K) mark for several weeks now, coming close twice with peaks at US$64,791 (AU$95,577) and US$64,789 (AU$95,574). However, a recent analysis by Santiment suggests a deeper narrative to the recent movements in the Bitcoin and altcoin markets.

According to the analysis, there might be a “rotation of capital from Bitcoin into altcoins” as traders are seeking higher returns by diversifying risks away from Bitcoin and towards altcoins like ETH and SOL.

Furthermore, the analysis suggests that the significant drop in Bitcoin’s open interest relative to smaller assets could be a sign that traders are anticipating the end of the recent market rally and may be trying to capitalise on peak prices.

Meanwhile, analysts at Bitfinex have observed that the recent crypto rally coincides with a notable increase in the positive correlation between Bitcoin and US equities, indicating a renewed risk appetite in the market.

Zooming out to the macro level, the analysis notes that Jerome Powell’s recent speech hints at upcoming changes in monetary policy, mainly due to the labor market dynamics showing signs of slowing down, which could lead to interest rate cuts.

Other key macro events highlighted by the analysis include China extraditing a suspect linked to a US$14 billion (AU$20.65 billion) crypto pyramid scheme from Thailand, Franklin Templeton expanding its blockchain presence by integrating its on-chain money market fund with the Avalanche network, and BlackRock’s iShares Ethereum Trust (ETHA) surpassing $1 billion (AU1.47 billion) in net inflows.

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