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Bitcoin rebounds above $82,000 as oil prices fall and risk appetite improves
Bitcoin rises above $82,000 as oil prices fall and US stock futures gain, but ETF outflows and market risks raise doubts about further gains in the near term.
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Bitcoin rose above $82,000 on Monday as falling oil prices helped improve investor confidence in risky assets. The world's largest cryptocurrency recovered after falling last week.
Bitcoin climbed as much as 2.3% during early Asian trading. It was trading at around $82,400 by noon in Singapore, showing a recovery from its recent decline, Bloomberg reported. Other major cryptocurrencies also gained. Ether rose as much as 3.7%, while Solana climbed more than 4.6% during the session.
Bitcoin rises as oil prices fall
The recovery in cryptocurrencies came as oil prices moved lower. Oil had reached a five-month high before retreating, helping improve demand for assets that carry higher investment risks. Signs that oil supplies from the Middle East had remained steady since the US war with Iran began also supported market sentiment.
Oil prices fell while US stock futures moved higher. Brent crude prices dropped as much as 2%. At the same time, futures linked to the S&P 500 rose around 0.8%, while Nasdaq 100 futures gained 1.3%, according to Bloomberg.
Also read: Bitcoin price today: BTC falls 3.6% as US wholesale inflation jumps 1.3% in September
Bitcoin recovers after last week's losses
The improvement in market conditions helped Bitcoin recover from last week's losses. Bitcoin had fallen roughly 3% last week as stocks also sold off. Technology shares led the decline amid fresh concerns about the huge amounts of money companies are spending on artificial intelligence (AI).
Damien Loh, chief investment officer at Ericsenz Capital, described Bitcoin's latest rise as a recovery after a difficult week for risky assets. He said the move was a “retracement after a big risk-off week,” according to Bloomberg. A risk-off period is when investors move away from riskier investments because of concerns about the market.
Bitcoin price outlook remains uncertain
Loh warned that Bitcoin may struggle to reach new highs in the near term. He said there were no clear immediate factors that could push the cryptocurrency to new record levels. He also warned that Bitcoin could face further losses because of the broader market environment, Bloomberg reported.
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Oil prices remain high despite Monday's decline. Crude oil was still trading at around $107 a barrel, above the levels seen during most of the previous week. This means energy prices continue to be an important factor for financial markets.
Bitcoin ETFs see more money flow out
Institutional investors have also reduced their exposure to Bitcoin. US-listed spot Bitcoin exchange-traded funds (ETFs) recorded $228.6 million in net outflows last week. This followed $681 million in outflows during the previous week, Bloomberg reported.
Bitcoin is still trading within the range seen last week. The cryptocurrency has remained between $80,000 and $85,000, despite Monday's recovery above $82,000. This shows that the latest rise has not yet pushed Bitcoin beyond its recent trading range.
