Stocks Hit Record Highs as Bitcoin Lags: $130K Forecast

The US stock market has achieved a historic milestone, closing at its highest weekly levels ever recorded. The S&P 500 finished the week at 6,791.68 while the US 100 Index reached 25,358.15, both setting new all-time highs. This record-breaking climb represents a continuation of the stock market’s steady ascent through the second half of the year, driven by easing inflation data, strong corporate earnings, and expectations of Federal Reserve rate cuts.

The tech-heavy US 100 Index led the charge, climbing past 25,000 for the first time ever this week as large-cap technology stocks posted strong quarterly results. This trend confirms that the long-running bull trend in traditional markets remains intact, with investor sentiment staying decidedly bullish amid expectations of further monetary policy accommodation from the Federal Reserve.

What makes this market environment particularly compelling is the stark contrast between Wall Street’s all-time highs and Bitcoin’s relative stagnation. After starting October in a breakout move to new all-time highs above $126,000, the leading cryptocurrency experienced a flash crash that took many traders by surprise. At the time of writing, Bitcoin is consolidating around $111,000 despite other asset classes showing strength.

Crypto analyst Ash Crypto argues that Bitcoin’s price is being artificially held back compared to how stocks have responded to the same macro backdrop. According to his analysis, if Bitcoin had followed the percentage gains of the S&P 500 or US 100 Index, it could already be trading between $140,000 and $150,000. This significant gap between Bitcoin’s current price and its potential price based on traditional market performance highlights the cryptocurrency’s unusual positioning in the current financial landscape.

The divergence between stock market performance and Bitcoin’s price action can be explained by the flow of liquidity in financial markets. According to market observers, the first surge of liquidity always appears in the stock market whenever the Federal Reserve begins to slow quantitative tightening or hints at loosening conditions. This occurs because the stock market is where the deepest capital pools and institutional participation exist, with established credit channels that respond immediately to monetary policy shifts.

Bitcoin, still positioned outside the traditional financial system, tends to lag this initial move. However, historical patterns show that once excess liquidity starts spilling into other assets, Bitcoin’s price has always increased at a much faster pace than stocks. This dynamic suggests that while Bitcoin may be slow to react initially, its eventual catch-up could be both rapid and substantial.

Despite Bitcoin’s current consolidation, on-chain data is already showing signs of an impending surge. Recent figures reveal that available sell-side liquidity—the total amount of Bitcoin sitting on exchanges ready to be sold—has dropped to just 3.12 million BTC, its lowest point in seven years. This reduction in exchange reserves typically indicates strong holding sentiment among investors and reduced selling pressure.

Furthermore, data shows that long-term investors have bought 373,700 BTC in the past 30 days, demonstrating significant accumulation during a period of price consolidation. These metrics, combined with Bitcoin’s current trading price of $111,600, provide a strong foundation for Ash Crypto’s prediction that Bitcoin will catch up soon and hit at least $130,000.

The combination of reduced exchange liquidity, substantial accumulation by long-term holders, and the historical pattern of Bitcoin eventually catching up to traditional market moves creates a compelling case for the cryptocurrency’s next major price surge. As the traditional markets continue their record-breaking run, all eyes remain on Bitcoin to see when it will begin its own historic climb.