Bitcoin bulls are targeting a key resistance level at $64,000, as BTC price performance finally aligns with risk assets like stocks. On Sept. 19, Bitcoin surged to new three-week highs, reaching $63,500 on the Bitstamp exchange, as the Wall Street open fueled further gains.

Bitcoin price strength mirrors stock market rally

The latest Bitcoin rally follows a favorable macroeconomic environment, with excitement building after the US Federal Reserve announced a 0.5% interest rate cut. This policy easing has boosted equities and gold, with the S&P 500 nearing a new all-time high. As stocks soared, Bitcoin also saw increased momentum, approaching resistance near its record peak from March.

BTC/USD 1-hour chart. Source: TradingView

According to trading firm QCP Capital, the recent shift in the US treasury yield curve, an indicator of recession, reflects growing market optimism. The firm noted that the Fed plans additional interest rate cuts before year-end, further driving demand for risk-on assets.

Institutional sentiment shifts as shorting declines

Amidst the broader market rally, institutional investors appear to be backing off from aggressive Bitcoin shorting. Data from CryptoQuant revealed that net positions in CME Group Bitcoin futures have declined by 75% over the past five months. This signals a significant reduction in bearish sentiment among institutions.

US spot Bitcoin ETF flows (screenshot). Source: Farside Investors

Despite mixed flows in the US spot Bitcoin ETFs, optimism remains high. Analysts like Michaël van de Poppe expect BTC to consolidate before resuming its upward trend, suggesting there is still room for investors to buy the dips.

As Bitcoin traders remain bullish, the market now looks toward breaking the $64,000 resistance level, with the potential for further gains in the near future.