Bitcoin retakes US$80,000 as choppy US demand tests rally

Bitcoin is back above US$80,000. The question is whether it can stay there.

The cryptocurrency jumped as much as 5.7% on Thursday as stocks rose, Treasury yields fell and the dollar weakened after Federal Reserve governor Christopher Waller signalled he would support keeping interest rates unchanged if inflation continues to ease.

The move pushed Bitcoin briefly to the highest price since May, though it remains within its recent trading range. The latest rally gives Bitcoin another shot at holding a level it has repeatedly failed to sustain.

That test comes with demand from US investors still looking uneven. Inflows into US-listed spot Bitcoin exchange-traded funds picked up in August but have proven inconsistent, including two days of sizable outflows in the past week. The seven-day average of the Coinbase premium, which compares prices on the largest US exchange with international platforms, has also remained negative for more than four months.

“We would like to see higher time frame confirmation alongside continued positive ETF flows before viewing this as a confirmed breakout from the range Bitcoin has traded in since Aug 2,” said Jake Kennis, senior research analyst at Nansen. “A sustained daily close above the upper end of that range would provide a stronger signal that the market is moving beyond the recent consolidation.”