Bitcoin ( BTC ) rose 4% between Oct. 23 and Oct. 24, following a retest of the $65,200 level. While this movement has largely been linked to a reversal of the previous day's outflows in spot Bitcoin exchange-traded funds (ETFs), the broader macroeconomic environment and a rally in tech stocks have also contributed to boosting investors’ risk appetite. In fact, several factors help explain Bitcoin's recent price increase.

The $79 million in net outflows from US spot Bitcoin ETFs on Oct. 22 raised some concerns, particularly as Oct. 23 marked the highest level for the US US Dollar Index (DXY) in three months, suggesting that traders were shifting to cash for safety. 

Inverse US Dollar Index (100/DXY) vs. Bitcoin/USD. Source: TradingView

Additionally, weak US real estate data on Oct. 23 sparked fears of a slowdown in the world’s largest economy. According to the Mortgage Bankers Association, US mortgage applications for home purchases and refinancing fell to their lowest levels since August during the week ending Oct. 18, marking the third consecutive decline. This drop was primarily driven by rising mortgage costs. As Bloomberg noted, “still-elevated asking prices risk extending a more than year-long period of sluggish housing demand.”

However, the uncertainty surrounding the weakening US economy faded when $192 million in spot Bitcoin ETF inflows were announced on Oct. 23. Interestingly, this surge was driven entirely by BlackRock’s iShares IBIT, as both Bitwise’s BITB and Ark’s ARKB saw $124 million in net outflows on the same day. Furthermore, recent earnings reports and positive job market data have made investors less risk-averse.

US job market data and tech stocks rally spurs optimism

The number of new unemployment aid applications in the US dropped by 15,000 in the week ending Oct. 19, according to the Labor Department. Meanwhile, the number of people receiving benefits after their initial week of aid, a proxy for hiring, increased by 28,000. These so-called continuing claims suggest a stronger job market, which could pave the way for further interest rate cuts from the Federal Reserve.

Another source of optimism in traditional markets came from the tech sector, as NVidia’s memory chip supplier, SK Hynix, reported record quarterly profits. The South Korean chipmaker's earnings were driven by robust demand from the generative artificial intelligence sector, according to CNBC.

Tesla, another major player in the US tech industry, saw its stock rise 17% after CEO Elon Musk announced on an earnings call that the company’s revenue could grow by as much as 30% in 2025. Tesla posted earnings of $0.72 per share, surpassing Bloomberg’s consensus estimate of $0.60. Additionally, the company’s energy generation and storage segment achieved a record 30.5% gross margin, further boosting Tesla’s share value, as reported by Yahoo Finance.

Related: Tesla reveals it didn’t sell any Bitcoin holdings in Q3

Bitcoin’s high correlation with the tech sector

Some may argue that Bitcoin’s drivers differ from those of the stock market, particularly tech stocks. However, the reality is that the 50-day correlation between Bitcoin and the stock market has remained above 80% throughout October.

Bitcoin/USD 20-day correlation vs. Tech sector futures (XAK). Source: TradingView

While this correlation fluctuates between positive and negative phases, Bitcoin and tech stocks often move in tandem when core drivers and risks align, such as during periods of higher market liquidity or concerns about an economic recession.

Ultimately, while spot Bitcoin ETF inflows contributed, it appears that favorable momentum from tech stocks and the strong job market were the primary factors behind Bitcoin’s price gains on Oct. 24.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.