Bitcoin Shows Strong Correlation with Institutional Demand Following 7% Uptick

Bitcoin price rose 7% to $90,600 as institutional demand increased, driven by bullish forecasts from asset manager VanEck. The firm projects a $2.9 million price tag by 2050, based on adoption in trade settlements and central bank reserves. Open interest climbed slightly to $61.26 billion while volume dropped sharply according to analysis.

VanEck's analysis suggests that Bitcoin could capture 5 to 10% of international trade and a portion of central bank reserves by 2050. The projection assumes continued regulatory clarity and infrastructure development, which are still evolving. The firm forecasts 15% annual returns over the next 25 years, significantly outperforming traditional asset classes.

Bitcoin's price remains trapped within a symmetrical triangle pattern, with the daily chart showing support at $89,500 and resistance at $99,742. Traders are closely watching for a breakout, which could signal a new bullish trend. The asset remains below all major EMAs, indicating a bearish bias unless volume surges according to technical analysis.

Why Did This Happen?

VanEck's projection reflects growing institutional interest in Bitcoin as a long-term store of value and settlement asset. The firm envisions a future where Bitcoin plays a role in global financial systems, similar to gold. This scenario depends on regulatory support and infrastructure development according to VanEck's outlook.

Bitcoin's price action shows mixed signals. While open interest remains stable, volume has dropped sharply, suggesting traders are waiting for a catalyst. Long/short ratios remain bullish, but price action remains stagnant. This creates a risk of a short squeeze if the price breaks below support according to market analysis.

How Did Markets Respond?

Wells Fargo, one of the largest U.S. banks, announced a shift in policy by allowing Bitcoin to be used as collateral for institutional clients. This move reflects broader acceptance of digital assets in traditional finance. The bank's offering enables clients to leverage Bitcoin holdings without selling them, reinforcing the asset's utility as reported.

MicroStrategy, the largest corporate Bitcoin holder, announced a $1 billion stock offering to fund additional Bitcoin purchases. The company plans to use the proceeds to buy up to 9,633 BTC at current prices. The move highlights the growing appetite for Bitcoin among institutional investors, despite market volatility according to company announcement.

Bitcoin's price slipped below $90,000 following a failed attempt to break above $95,000. ETF outflows and U.S. economic data contributed to the pullback. The S&P 500 also fell on Wednesday, adding to the risk-off mood. The labor market data, scheduled for release, could influence the Fed's rate decision and impact Bitcoin's direction according to market analysis.

What Are Analysts Watching Next?

Bitcoin's near-term direction depends on whether it can break out of the symmetrical triangle pattern. A close above $91,500 would confirm a bullish trend and target $93,600. A breakdown below $89,500, however, could expose the $86,000 support level according to technical analysis.

Analysts are also watching for regulatory developments and macroeconomic factors. The U.S. government shutdown delayed key economic data, adding uncertainty to the market. If the labor market remains weak, it could support expectations for rate cuts and drive Bitcoin higher according to economic analysis.

Bitcoin's long-term potential remains intact despite short-term volatility. VanEck's model suggests a future where Bitcoin competes with gold as a reserve asset. This outcome would require broader adoption and regulatory clarity. Until then, investors remain cautious, balancing bullish expectations with market risks according to VanEck's projection.