After a brief pullback driven by profit-taking, the price of Bitcoin has returned to the $120,000 mark, thanks to a recovery in institutional fund inflows and clearer regulatory signals from the United States. The passage of the GENIUS Act by the U.S. House of Representatives marks an important milestone, providing much-needed clarity, which has historically been a barrier to large-scale investment. This legislative progress is creating a more favorable environment for retail and institutional participants, encouraging capital inflows despite ongoing macroeconomic headwinds.
Market Dynamics: Profit-Taking, Stock Correlation, and Liquidity Trends
Bitcoin's recent price movements are closely correlated with the U.S. stock market, which has shown signs of stagnation since early July. QCP Capital notes that the S&P 500 has only risen slightly by 0.6% over five days, which may indicate market weakness that could impact cryptocurrency trends. However, new liquidity continues to flow into the market driven by the adoption of corporate fund management and inflows of stablecoins. Vincent Liu, Chief Information Officer of Kronos Research, emphasizes that despite the strong upward trend, risks such as a potential dollar rebound and ongoing inflation remain. Upcoming macroeconomic data, including unemployment claims, will be crucial in determining Bitcoin's short-term trajectory.
