Bitcoin, heading back to $85,000?...Risk assets rebound as S&P 500 hits all-time high

▲ Bitcoin (BTC) / ChatGPT-generated image

Bitcoin (BTC) has rebounded to around $80,000, recovering a significant portion of its losses following the shock of US inflation data. As the US stock market continues to hit all-time highs despite high inflation concerns and risk asset preference strengthens again, there's a forecast that Bitcoin could rise to $84,000-$85,000 if it maintains its key support level.

Cointelegraph reported on May 14 (local time) that Bitcoin touched $80,000 around the Wall Street opening. Bitcoin had fallen the day before after the announcement of high US inflation data but later recovered most of its losses. During the same period, the US stock market quickly absorbed inflation pressure and showed strength, with the S&P 500 recording an all-time high closing price and continuing its upward trend on Thursday.

The Dow Jones Industrial Average retested the 50,000-point level for the first time since early February. Cointelegraph noted that despite high inflation potentially increasing concerns about future financial policy tightening, the US stock market did not significantly reflect this. Investment research account The Kobeissi Letter assessed that investors' risk appetite is “soaring.”

According to The Kobeissi Letter, assets under management (AUM) for US leveraged ETFs reached a record high of $177 billion. Since the March low, leveraged ETF AUM has increased by a total of $45 billion. The Kobeissi Letter also cited increased global liquidity as a favorable backdrop for risk assets. US M2 money supply increased by $1 trillion, or 4.6% year-over-year, reaching a record high of $22.7 trillion, with analysis adding that the speed of money supply growth is accelerating.

The oil market also garnered attention alongside risk asset trends. Amid the ongoing conflict between the US and Iran, West Texas Intermediate (WTI) retested the $100 per barrel mark from above but seemed unable to break new highs.

Regarding Bitcoin's price movement, trader Daan Crypto Trades saw the current market at a “crucial inflection point.” He explained that Bitcoin is maintaining the area around its previous high before April, approximately $79,400. This range was presented as a key support level to determine the continuation of a short-term rebound.

Another trader, CrypNuevo, analyzed that if Bitcoin maintains this support level, it could rise to $84,000-$85,000, where the 50-week exponential moving average is located. Conversely, if it fails to maintain this support, it could fall back into the middle price range, and if momentum doesn't revive, it could be exposed to the bottom of that range.

Bitcoin is currently defending its support level, backed by a risk-asset-friendly environment including a strong US stock market, increased leveraged ETF funds, and expanded money supply, despite inflation burdens and tightening concerns. The maintenance of the support level around $79,400 is key to the short-term trend, and if it holds, the scenario of breaking $85,000 is expected to once again capture market attention.

*Disclaimer: This article is for investment reference only and does not assume responsibility for investment losses based on it. The content should be interpreted for informational purposes only.*