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Lasting Rally? S&P 500 Sets Historic Milestone Crossing 5,000 for the First Time as Bitcoin Price Soars Past $47,000

As the price of the flagship cryptocurrency Bitcoin ($BTC) moves up to surpass the $47,000 mark as spot Bitcoin exchange-traded funds (ETFs) keep on attracting inflows ahead of the halving, the stock market’s benchmark index, the S&P 500, reached a new all-time high above 5,000.

According to Yahoo Finance data, the S&P 500 rose as soon as markets opened to surpass the 5,000 level for the first time in history, while the  Dow Jones Industrial Average dropped around 0.35% and the Nasdaq moved up nearly 0.9%.

This week, a series of positive quarterly earnings reports lifted stock prices during a period lacking in significant economic news, which typically influences market movements based on its relevance to the Federal Reserve’s policy decisions.

Investors paid extra attention to the updated Consumer Price Index (CPI) figures released on Friday, given their critical role in informing the Federal Reserve’s stance on interest rates.

Fed officials have emphasized their cautious approach, waiting for clear signs of easing price pressures before considering any reductions in interest rates. As stock prices rise, so did bond yields, with 1-month S Treasurys seeing a rise to 5.39%, while 6-month Treasurys are now at 5.287%.

Meanwhile spot Bitcoin ETFs have attracted a net $8 billion after launching on January 11, with an initial $6 billion net outflow from Grayscale’s recently converted Bitcoin fund, has started to slow down.

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These investments come roughly two months ahead of Bitcoin’s expected halving event, which will reduce the coinbase rewards miners receive for finding a block from 6.25 BTC to 3.125 BTC.

The reduction will effectively mean that the amount of new BTC entering the market will abruptly be cut in half, which could lead to price rises if demand is maintained or if it rises.

Bitcoin’s rise comes at a time in which whale wallets has been rising to the point it’s the highest since November 2022, as large cryptocurrency investors took advantage of its price stability.

These large whales are accumulating BTC at a time in which a key price indicator has started flashing a buy signal, suggesting the price of the flagship cryptocurrency could keep on rising in the near future after consolidating around the $43,000 mark as it recovers from a drop that came along with the launch of spot exchange-traded funds in the US.

Bitcoin miners have notably been selling their BTC holdings, moving over 4,000 coins valued at around $173 million from their wallets to cryptocurrency exchanges in a single day, the highest figure seen since May 16, 2023. Their reserves have now dropped to the lowest level since 2021.

Featured image via Unsplash.

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