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Bitcoin recently surged above $42,000, having <a href="https://bitcoinist.com/bitcoin-price-crashed-below-40000/" rel="nofollow">traded below $40,000</a> for several days. This market recovery is believed to be a result of different factors, including <a href="https://bitcoinist.com/economist-us-dollar-bitcoin/" rel="nofollow">recent revelations about the US economy</a>.&nbsp; 
<h2 id="macroeconomic-factors-that-contributed-to-the-recent-bitcoin-surge">Macroeconomic Factors That Contributed To The Recent Bitcoin Surge</h2> 
The personal income expenditures (PCE) price index, a <a href="https://bitcoinist.com/bitcoin-btc-leading-indicator-cpi-inflation/" rel="nofollow">leading inflation indicator</a>, was released on January 26 and <a href="https://www.cnbc.com/2024/01/26/pce-inflation-december-2023-.html" rel="nofollow">reported</a> to have been lower than expectations. This suggests that inflation in the United States is cooling off, and experts predict that the Federal Reserve will likely reduce their aggressive monetary policies.&nbsp; 
The Fed’s hawkish stance is known to have a <a href="https://bitcoinist.com/bitcoin-recovers-on-fed-hike/" rel="nofollow">negative effect on Bitcoin’s price</a> and the broader crypto market. As such, this recent development is a positive one and is something that could have influenced investors to double down on their investments in the flagship cryptocurrency, thereby sparking a price surge.&nbsp; 
Meanwhile, <a href="https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/" rel="nofollow">data</a> from the US Treasury recently showed that the country has hit an <a href="https://en.wikipedia.org/wiki/2023_United_States_debt-ceiling_crisis#:~:text=On%20May%201%2C%202023%2C%20Yellen,increase%20was%20in%20December%202021." rel="nofollow">all-time debt</a> of $34,1 trillion. While this has raised concerns about the looming crash of the US dollar, it has also presented Bitcoin and other cryptocurrencies <a href="https://bitcoinist.com/economist-us-dollar-bitcoin/" rel="nofollow">as a haven</a> to hedge against the potential devaluation of the nation’s currency.&nbsp; 
Interestingly, different financial analysts, including <a href="https://www.newsbtc.com/bitcoin-news/grayscale-bitcoin-price/">renowned economist Peter Schiff</a>, have continued to predict the imminent crash of the US dollar. In light of this, <a href="https://bitcoinist.com/bitcoin-is-a-hedge-tool-robert-kiyosaki/" rel="nofollow">finance author Robert Kiyosaki </a>has urged everyone to invest in Bitcoin to avoid becoming poorer due to the government’s actions.&nbsp; 
Another factor believed to have contributed to Bitcoin’s recent surge is the expiration of monthly BTC options contracts on Deribit. The expiry outcome more than likely played a crucial role in Bitcoin’s rally, considering that CryptoQuant CEO Ki Young Ju <a href="https://bitcoinist.com/gbtc-not-behind-bitcoin-crash-cryptoquant-ceo-says/" rel="nofollow">had pinpointed</a> the derivatives market as responsible for Bitcoin’s recent decline.&nbsp;&nbsp; 
<img loading="lazy" decoding="async" class="aligncenter size-medium" src="https://www.tradingview.com/x/YiujgGo6/" alt="Bitcoin price chart from Tradingview.com" width="3266" height="1530"> 
<h2 id="gbtc-s-outflow-slows-for-the-fourth-consecutive-day">GBTC’s Outflow Slows For The Fourth Consecutive Day</h2> 
<a href="https://bitcoinist.com/grayscale-bitcoin-etf-outflows-end-experts/" rel="nofollow">Grayscale’s GBTC</a> <a href="https://x.com/BitMEXResearch/status/1751024039043219682?s=20" rel="nofollow">saw</a> an outflow of just $255.1 million on January 26, continuing a recent trend of reduced outflows from the fund. NewsBTC <a href="https://www.newsbtc.com/news/bitcoin/us-government-130-million-bitcoin/">reported</a> how the Bitcoin ETF had seen outflows of $515 million, $429 million, and $394 million on January 23, 24, and 25, respectively. 
As <a href="https://x.com/JSeyff/status/1751028278545039670?s=20" rel="nofollow">noted</a> by <a href="https://bitcoinist.com/xrp-etf-approved-in-2024/" rel="nofollow">Bloomberg analyst James Seyffart</a>, January 26 also happened to be the lowest outflow day for GBTC since converting to a <a href="https://bitcoinist.com/breaking-spot-bitcoin-etfs-approved-by-us-sec/" rel="nofollow">Spot Bitcoin ETF</a>. This development suggests that the fund’s investors may be cooling off on taking profits. It is also significant because <a href="https://bitcoinist.com/breaking-grayscale-scores-victory-against-us-sec-spot-bitcoin-etf-imminent/" rel="nofollow">Grayscale </a>has contributed to the selling pressure that has plagued Bitcoin of late.&nbsp; 
At the time of writing, Bitcoin is trading at around $41,700, up over 4% in the last 24 hours according to data from CoinMarketCap. 
&nbsp;

Here Are The Major Drivers Behind The Bitcoin Price Recovery Above $42,000

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