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Key Reasons Why Bitcoin (BTC) Topped $71,000: Details

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Wed, 5/06/2024 - 11:54
Key Reasons Why Bitcoin (BTC) Topped $71,000: Details
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Bitcoin, the first and largest cryptocurrency by market cap  surged past the $71,000 mark, showcasing gains for the fifth consecutive day. This uptrend mirrors the growing optimism on global markets, fueled by the anticipation of potential Federal Reserve interest rate cuts within the year.

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Bitcoin's current streak of daily gains is the longest in three months. At the time of writing, BTC was up 3.36% in the last 24 hours to $70,951, just 3.73% shy of its record high of $73,750 set in mid-March.

Bitcoin began to rebound after reaching a low of $69,024 on May 31 and has spent the first few days of June in the green. Bitcoin surpassed $71,000 on Tuesday, achieving highs of $71,108, and has since risen to intraday highs of $71,375 in today's trading session, on course for its fifth straight day of gains.

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BTC/USD Daily Chart, Courtesy: TradingView

This sustained upward momentum comes as market traders increasingly bet on a Federal Reserve rate reduction as early as November, following indicators of easing U.S. inflation and a cooling job market.

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Despite recent challenges in sustaining its value above $70,000, Bitcoin has been buoyed by fresh optimism surrounding Bitcoin ETFs, which suddenly saw shockingly high inflows on Tuesday and progress in Washington toward a more defined regulatory framework for cryptocurrencies.

Expectations of looser financial conditions that tend to benefit speculative assets like cryptocurrencies, alongside these developments, have provided a favorable backdrop for Bitcoin's ascent past the $71,000 mark.

Moreover, a short-term, 30-day correlation between Bitcoin and the Nasdaq 100 Index, which tracks U.S. technology stocks, is at its highest since early 2023. This correlation suggests that further advances in the tech stock index could signal corresponding upward movements for Bitcoin.

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