Bitcoin hit a new record after a month-long drawdown. Why is it being bought up again?

Bitcoin has reached a new all-time high: its rise coincided with a rally in the US stock market. Investors began to take more risks and now bet on bitcoin's growth above $125,000. The same macro signals - moderate inflation and hopes for lower interest rates - are pushing up both crypto-assets and stocks.

Bitcoin exchange rate rose to $124,128 during trading, having updated the record value for the first time in a month, follows from the data of CoinGecko service. The record was recorded shortly after the main U.S. stock index S&P 500 closed at a new high for the second consecutive session, Bloomberg reports.

The synchronized dynamics demonstrates how speculative segments and major equity indices feed off the same optimism, the agency notes. U.S. inflation data this week boosted bets on U.S. Federal Reserve policy easing in September, which supported capital flows from blue chip stocks to more volatile digital assets.

According to Hyblock data, at bitcoin's price of $122,500, a cluster of short positions formed, the closing of which pushed bitcoin up. CoinGlass data shows that if the bitcoin price overcomes the liquidity range from $122,800 to $125,500, then stop orders will start to work en masse in this corridor and short positions of almost $2 billion will be under the threat of liquidation, Cointelegraph reports. In this case, the forced buyout of short positions by exchanges will create additional demand.

"A sustained foothold above $125,000 could push bitcoin toward the $150,000 mark," IG analyst Tony Sycamore said. According to him, bitcoin's appreciation this week is driven by growing investor confidence in the Fed's rate cuts, robust institutional demand and measures by US President Donald Trump's administration to simplify investment in crypto-assets, Reuters writes.

"Cryptocurrencies have a positive correlation with stocks, with the correlation stronger for ether (Ethereum) than bitcoin," Chris Newhouse, director of research at Ergonia, told Bloomberg. Investor sentiment in the crypto market looks positive, he added.

"The combination of moderate inflation, rising hopes for lower interest rates, and unprecedented institutional participation via ETFs has created a strong tailwind," said Ben Kurland, head of cryptocurrency research platform DYOR. The main difference in the new cryptocurrency rally is the maturity of demand: it is not retail euphoria, but structural buying by asset managers, corporations and sovereign wealth funds, Kurland emphasized.

Bitcoin has grown by a third since the start of 2025, thanks to regulatory victories that the crypto industry has been seeking for a long time. President Donald Trump, who has dubbed himself the "crypto president," and his family have been heavily involved in the sector over the past year, Reuters notes.

Bitcoin's rise has triggered a broad rally in the cryptoasset market. According to Reuters, citing data from CoinMarketCap, the total market capitalization of the crypto sector increased to $4.2 trillion from $2.5 trillion in November 2024, when Trump won the presidential election.

This article was AI-translated and verified by a human editor