Bitcoin's price is challenging the all-time high set in mid-July. Analysts attribute this to a series of factors, including Trump's allowance for U.S. pension plans to invest in cryptocurrencies and rumors that gold bars may face new U.S. tariffs.

Over the past 5 days, Bitcoin has surged more than 4.9%, breaking through $120,000. The second-largest token, Ethereum, once reached $4,350, hitting its highest level since December 2021, with a 78% price increase in July alone.

The rally in cryptocurrencies stems from growing interest from large investors. Data compiled by Coingecko shows that digital asset financial firms have accumulated Bitcoin reserves worth $113 billion so far. Meanwhile, according to strategicethreserve.xyz, Ethereum-related investment vehicles have amassed around $13 billion in Ethereum reserves.

Rachael Lucas, a cryptocurrency analyst at BTC Markets, noted that Bitcoin's rise is driven by increased institutional investment and shifting market sentiment following the U.S. imposition of new tariffs on imported gold bars. As gold faces supply bottlenecks and policy risks, Bitcoin is increasingly favored by investors as a store of value.

Experts also predict that a positive macroeconomic outlook will continue to support risk assets, including cryptocurrencies, with Bitcoin expected to break its all-time high this month.

Although Bitcoin is often called "digital gold," its price trends have become highly correlated with risk assets in recent years. Ecoinometrics, a cryptocurrency-focused intelligence newsletter, stated on Sunday that the strengthened correlation between Nasdaq and Bitcoin could explain the token's recent price movements.

Meanwhile, U.S. stocks are being buoyed by growing optimism over potential Federal Reserve rate cuts. Market attention is now turning to the July Consumer Price Index (CPI) report, set to be released on Tuesday. Economists expect the annualized inflation rate to rise by 0.1 percentage points to 2.8%. Any reading weaker than expected could strengthen the case for a Fed rate cut as early as September.

Sean McNulty, Head of Asia-Pacific Derivatives Trading at digital asset prime broker FalconX Ltd., further pointed out that Bitcoin and Ethereum positions are heavily skewed toward call options for September and December, betting on macro rate-cut timing and the continued acceptance of cryptocurrencies by traditional finance.

Sean Dawson, Head of Research at on-chain options platform Deribit, added that the current cryptocurrency bull market still has strong momentum. Based on volatility data, Bitcoin is expected to reach $150,000 by the end of the year.

However, some investors have adopted relatively defensive strategies to hedge against the possibility of higher-than-expected inflation data.

Dawson noted that concerns over unexpected inflation figures have intensified, which could trigger minor panic and lead to a sharp pullback.