Bitcoin posted modest gains entering the New York trading session Thursday as it renewed its positive correlation with the US stock market.
The benchmark cryptocurrency added $113, or 0.85 percent, to trade at $13,394 as of 11:45 EDT. Its gains came after the Bureau of Economic Analysis reported a quarterly uptick in the US’s gross domestic product (GDP).
As per the commerce department’s assessment, the US economic output rose 7.4 percent in the third quarter compared to the second one. Meanwhile, a separate report from the Labor Department showed a decline in the initial unemployment benefits, pointing to a slow recovery in the jobs market.
The uplifting numbers prompted investors to raise their bids in the US equities. As of this time of writing, the benchmark S&P 500 was up 0.70 percent, while the blue-chip Dow Jones and the tech-savvy Nasdaq Composite surged 0.17 and 1.28 percent, respectively.
Nasdaq posted better gains also as investors waited for the third-quarter earnings reports of “Big Tech” firms, including Facebook, Apple, Amazon, Alphabet (Google), and Twitter.
Their stocks have posted incredible gains this year. Investors expect them to continue going higher, believing that the next round of lockdown measures would push more people towards their services.
Bitcoin Tails Gains
An uplifting US stock market also eased the selling pressure off Bitcoin. The cryptocurrency spent the Asian and European sessions in the red. Nevertheless, its first significant green candle appeared only after the New York session open, illustrating the US data’s impact on its intraday price performance.
Traders watched the US markets for two critical events: the November 3 presidential election and the second coronavirus stimulus package. They earlier assessed that a clear win for either Donald Trump or his contender Joe Biden would pave the way for the long-delayed fiscal relief.
A stimulus of at least $2 trillion would remove the liquidity burden off the US market. Eventually, the money would make way into the Bitcoin and crypto industry, as more and more people would choose an alternative against the lower-yielding government bonds and the QE-stuck US dollar itself.
The strategy played out successively after the launch of the first coronavirus relief fund in April 2020. About $3 trillion of cash injection played a crucial role in sending the Bitcoin price up by almost 250 percent from its mid-March nadir of $3,858.
So far, Bitcoin looks to be trading comfortably above short-term ascending support as it eyes a run towards $14,000.