Why Has Bitcoin Rebounded? Will the Uptrend Continue?

Bitcoin has surged over 4% in the past 24 hours, reaching above $84,000, according to cryptocurrency data provider CoinGecko.

The largest cryptocurrency by market cap briefly touched $85,000 earlier in the day before pulling back. The rally coincided with a broader recovery in risk assets as markets responded positively to signs of macroeconomic stability and the apparent success of the U.S. government in averting a shutdown.

Bitcoin’s rise reflects renewed confidence in financial markets, according to Strahinja Savic, head of data analysis at crypto consultancy FRNT Financial. “Some renewed macro stability suggests that Bitcoin and crypto are recovering alongside other risk assets,” Savic said in a Telegram message. “Lower-than-expected inflation figures and the perception that geopolitical risks are easing are contributing to easing macro concerns and providing a tailwind for Bitcoin.”

He also noted that some Bitcoin investors are fueling the recovery by taking the opportunity to “buy the dip.”

Bitcoin’s gains came after Senate Minority Leader Chuck Schumer expressed support for a Republican measure to fund the government. A government shutdown could add further uncertainty to markets already grappling with concerns about stagflation, an economic scenario in which growth slows while inflation remains high.

Risk assets have been under pressure for weeks due to trade war fears sparked by U.S. President Donald Trump's tariffs on major trading partners. Additional macroeconomic concerns, including the government's controversial cost-cutting measures, have also weighed on investor sentiment.

The University of Michigan Consumer Sentiment Index fell to its lowest level since 2022, signaling declining confidence in the U.S. economy. The survey also found that inflation expectations rose to their highest level in more than two years. Joe DiPasquale, CEO of crypto asset manager BitBull Capital, said the data is driving investors to Bitcoin as a hedge against economic uncertainty. He also noted that institutional confidence remains strong, with BlackRock resuming its Bitcoin purchases and making a $25 million investment.

Despite the current bullish momentum, DiPasquale warned that volatility remains a concern and warned of potential significant corrections ahead.

*This is not an investment recommendation.