Bitcoin has since retraced to $123,500, sitting around the previous all-time high, which now acts as a support for the uptrend.
The heavy institutional buying through regulated products removed bitcoin from circulation, creating upward pressure on spot markets.
Macroeconomic factors amplified the move as a US government shutdown steered investors toward perceived hedges like Bitcoin and gold.
The shutdown concerns elevated Bitcoin’s appeal as a safe-haven asset alongside traditional defensive positions, while the strength of equity futures and broader risk appetite provided additional tailwinds.
Traders await the Federal Reserve’s communications later this month for confirmation of a more dovish monetary policy path, which could further support risk assets, including cryptocurrencies.
The convergence of institutional demand through ETFs, macroeconomic uncertainty driving safe-haven flows, and positive risk sentiment in traditional markets created conditions for Bitcoin to break through the $126,000 threshold.
