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The Bitcoin (CRYPTO: BTC) price is up 1% over the past 24 hours.
The world’s top crypto is currently worth US$23,084 (AU$3,169).
Bitcoin kicked off the month trading for US$23,289, meaning it’s currently down a fraction in August after posting a gain of 22% in July.
But the Bitcoin price, as you’re likely aware, tends to move quickly. In fact, just a few hours from the time of writing, the Bitcoin price was in the green for August, trading at US$23,579, CoinMarketCap tells us.
Commenting on the recent rally, eToro’s market analyst and crypto expert Simon Peters said, “While still a way to go to recover losses of H1, cryptoassets such as Bitcoin are witnessing a mini revival.”
What’s influencing the Bitcoin price?
It’s not just the Bitcoin price that rallied in July.
Most risk assets, like high-growth tech shares, enjoyed a strong month, as witnessed by the 12% gain posted by the NASDAQ and the 15% gain here in Australia on the S&P/ASX All Technology Index (ASX: XTX).
“We’re very much seeing that the syncing up with equity markets is continuing,” Peters said. “July saw stocks, particularly tech and other higher-risk-profile equities surge back. Much of the effects of inflation and rate hikes now appears priced in, with markets sanguine about recession worries.”
The rising impact of institutional investors
The greater presence of institutional investors in crypto markets looks to be adding to the correlation between the Bitcoin price moves and other risk assets.
According to Peters:
Institutions have treated crypto holdings in much the same way as these equities, which is why there’s greater correlation now than in the past. As those big institutions move back into the space the crypto investors could see valuations tick back to better levels.
So, why has the Bitcoin price been retracing over the past few hours?
Our best guess is that futures on the NASDAQ have also turned moderately negative, indicating a likely retrace for risk assets when US markets open tomorrow (overnight Aussie time).