Bitcoin Recovers To USD 81,000 After Recent Slide: What Is Driving The Rebound?

Bitcoin has recovered above the USD 81,000 mark after coming under pressure. The cryptocurrency has gained in recent days, with the market now tracking the factors behind the recovery and its near-term outlook.

At the time of writing, Bitcoin was trading at USD 81,669.77, up 1.47 per cent in the past 24 hours and 5.27 per cent over the past week. The cryptocurrency had fallen to around USD 75,000 after the September 15 vote on the CLARITY Act, before recovering above the USD 81,000 level. Bitcoin exchange-traded funds (ETFs) recorded a net inflow of USD 433 million on September 18, according to CoinMarketCap data.

What Is Driving Bitcoin’s Recovery?

Several factors have been identified as contributing to Bitcoin’s recent recovery.

Rajagopal Menon, Vice President, WazirX, said, “Bitcoin’s recovery from roughly USD 76,000 to above USD 81,000 reflects a mix of renewed spot buying and derivatives-market positioning. U.S. spot Bitcoin ETFs attracted about USD 159 million on September 17, followed by a stronger USD 433 million inflow during Friday’s session.”

He added that the recovery also reflects renewed institutional buying, dip buying and short covering, which added momentum to the move.” He believes that the rebound suggests that traders are treating the failed vote as a manageable near-term setback.

The regulatory developments are also among the factors being watched in the recent move.

“Bitcoin’s move is driven by three factors coming together. First, regulatory momentum has returned with the SEC’s five-year exemption for certain tokenised-stock venues,” Prateek Gupta, Head of Business, Mudrex, said.

He added, “Fresh CFTC rulemaking has reinforced the signal that regulatory infrastructure is still progressing despite the CLARITY Act stalling in the Senate.”

Can Bitcoin Sustain Its Recovery?

“The focus now will be on whether BTC can sustain levels above USD 80,000 to USD 81,000,” said Balaji Srihari, VP – Business, India, CoinSwitch.

He added that continued ETF inflows, healthy liquidity and institutional participation will be key indicators of the strength of the recovery, while volatility is likely to remain a defining feature of the asset class.

Gupta said, “A move above USD 83,000 could open doors to USD 88,000, while any pullback triggered by geopolitical escalations could have Bitcoin retest the USD 74,000 support zone.”

Other Major Cryptocurrencies Also Rise

Bitcoin’s recovery has come alongside gains in other major cryptocurrencies. Binance BNB was trading at USD 774.84, up 0.38 per cent in the past 24 hours and up 7.12 per cent over the past week, while Ethereum was at USD 2,668.42, up 0.15 per cent and up 6.07 per cent, respectively.

XRP was at USD 1.42, up 3.14 per cent in 24 hours and up 3.23 per cent over the week, while Solana was at USD 111.63, up 2.57 per cent in the past 24 hours and up 10.34 per cent over the week.