The US stock market has achieved a historic milestone, marking its highest weekly levels ever recorded. The S&P 500 closed the week at 6,791.68, while the US 100 Index reached 25,358.15, both setting new all-time highs. This surge is attributed to a mix of easing inflation data, strong corporate earnings, and growing expectations for Federal Reserve rate cuts, all of which have contributed to a bullish investor sentiment.
The S&P 500’s remarkable ascent continues a steady trajectory throughout the second half of the year, bolstered by the Federal Reserve’s rate cut in September and the anticipation of further cuts, coupled with renewed confidence in corporate performance. The tech-heavy US 100 Index is at the forefront of this trend, surpassing 25,000 for the first time this week, thanks to robust quarterly results from major technology companies. The enduring bull market in traditional equities remains intact amid this positive momentum.
However, a stark contrast is emerging between the soaring performance of Wall Street and the stagnation of Bitcoin. After beginning October with a breakout above $126,000, Bitcoin experienced a sudden flash crash that caught many traders off guard. Currently, the leading cryptocurrency is consolidating around $111,000, while other asset classes continue to show strength.
Crypto analyst Ash Crypto highlighted this discrepancy in a recent observation on social media platform X. The analysis suggests that Bitcoin’s price is being artificially restrained, especially when compared to the impressive gains seen in the S&P 500 and the US 100 Index. If Bitcoin had mirrored the percentage increases of these stock indices, it could already be trading between $140,000 and $150,000.
The flow of liquidity into financial markets tends to first favor equities whenever the Fed hints at slowing down quantitative tightening or easing conditions. This preference is driven by the depth and institutional participation prevalent in the stock market, which enables quicker reactions. Conversely, Bitcoin operates outside the traditional financial system, often lagging behind these initial movements. However, Ash Crypto notes that once excess liquidity begins to permeate other assets, Bitcoin typically rallies at a much faster rate than stocks, predicting that it will soon catch up and reach at least $130,000.
Evidence from Bitcoin’s on-chain data reinforces this anticipation of a looming surge. Recent statistics reveal that sell-side liquidity—the amount of Bitcoin available for sale—has plummeted to just 3.12 million BTC, the lowest level in seven years. Additionally, long-term investors have acquired 373,700 BTC over the past month, signaling increasing confidence in the asset.
As of the latest data, Bitcoin is trading at approximately $111,600, leaving many investors and analysts eagerly watching for potential upward momentum in the face of a thriving stock market.
