Bitcoin ( BTC ) price surged by 8.2% over the seven days leading up to Sept. 25, rising from $59,886 to $64,816. However, the $64,500 resistance level proved more challenging than expected. This same level was last tested a month prior, on Aug. 25. Weak macroeconomic data contributed to a decreased risk appetite among investors, but other factors also played a role in sparking a Bitcoin price correction on Sept. 25.

Fear of recession impacts investor sentiment

According to Yahoo Finance, the median new home sales price in the United States fell 4.6% year-over-year in August, following the fastest price increases since early 2022. Home prices have now declined for seven consecutive months, marking the longest stretch of declines since 2009. Notably, housing inventory remains near record highs, with 467,000 completed homes currently available for sale.

3 reasons why Bitcoin (BTC) struggles to hold $64.5K image 0

US new home sales, thousands. Source: Continuum Economics

Another point of concern for global investors stems from China, where the central bank announced interest rate cuts and introduced a $142 billion credit line for individuals and businesses. Analysts at Nomura commented in a note that these measures are not “enough to arrest the worsening economic slowdown,” adding that “fiscal measures should take the front seat,” though they consider such steps unlikely to materialize, according to Yahoo Finance.

On Sept. 24, after the US market closed, Berkshire Hathaway, led by Warren Buffett, announced further reductions in its stake in Bank of America, with total sales reaching $8.9 billion over less than three months. This move has heightened concerns in financial markets as the S&P 500 hit an all-time high on Sept. 25. Bitcoin traders are wary that a potential correction in the stock market could negatively impact cryptocurrency performance.

US elections a potential stock market bubble amplify

In addition to concerns about a global economic downturn, Bitcoin investors are also closely watching the upcoming US presidential election in November, with a focus on candidate Kamala Harris. Alex Svanevik, CEO of blockchain analytics platform Nansen, remarked that the Democrats have created a “relatively hostile environment for crypto.” He anticipates that a Harris presidency would likely continue the current administration's crypto policies, which are viewed as less supportive of the industry’s development in the US.

Bitcoin bulls are holding onto hope for a Republican victory in the upcoming US election, specifically supporting candidate Donald Trump. As part of his campaign, Trump has advocated for Bitcoin miners and even spoke at the Bitcoin 2024 conference in Tennessee. Recently, Trump was spotted in a New York City bar and restaurant known for accepting Bitcoin, where he personally witnessed a Bitcoin transaction being used to purchase hamburgers.

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With the US election outcome still too close to call, Bitcoin traders are adopting a cautious stance as the BTC price approaches its highest levels since August. This sentiment is reflected in the subdued behavior of traders using leverage. According to Bitcoin derivatives' primary metric—the futures premium—there has been a lack of enthusiasm for betting on further price increases in recent weeks.

Due to the longer settlement period, monthly contracts should trade at a 5% to 10% annualized premium under typical market conditions. Any figure below this range is often considered bearish, as crypto traders tend to be optimistic by nature.

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Bitcoin 2-month futures annualized premium. Source: Laevitas.ch

Since Sept. 2, the Bitcoin futures premium has hovered around a neutral 6%, indicating a lack of conviction among bulls. For comparison, on July 30, the BTC futures premium surged to 11% following a 25% price rally over three weeks. This contrast suggests that despite Bitcoin's 20% gains between Sept. 6 and Sept. 24, sentiment in the derivatives market has remained flat.

For the time being, Bitcoin's underwhelming performance on Sept. 25 can be attributed to weak macroeconomic data, fears of a stock market correction , and uncertainty surrounding the impact of the US presidential election on the cryptocurrency landscape.

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.