Bitcoin (BTC) took a hit on Friday after the release of mixed US jobs data, leading to a price drop to $69,000 and over $411 million in liquidations. This decline reflects the crypto market’s sensitivity to economic indicators, which in this case presented both positive and concerning signs for the US economy.
Jobs Added, Unemployment Up: A Hawkish Surprise
The May jobs report showed a significant expansion in non-farm payrolls, reaching 272,000 – well above April’s figures and analyst expectations. Sectors like healthcare, government, and hospitality saw notable gains. However, a curveball came in the form of the unemployment rate, which rose to 4% for the first time since early 2022.
Analysts interpret this report as hawkish, potentially delaying anticipated interest rate cuts. The CME FedWatch Tool currently indicates a 50.5% chance of a rate cut by September. This market uncertainty translates to increased volatility in the crypto market, especially for Bitcoin.
Liquidations Hit, But Long-Term Bullishness Persists
Data from Coinglass reveals that the past 24 hours saw a total of $411.88 million in crypto liquidations, impacting nearly 148,000 traders. Long positions, which represent bets on rising prices, accounted for a larger share of these liquidations ($360.41 million) compared to short positions ($51.47 million).
Despite the recent dip, renowned analyst Markus Thielen maintains a positive long-term outlook for Bitcoin. His latest report highlights the potential for Bitcoin to reach $83,000, driven by a technical indicator (head-and-shoulders formation) and supportive macroeconomic factors.
Easing Cycle and Institutional Interest: A Tailwind for Bitcoin
Thielen emphasizes the significance of the global central bank easing cycle, pointing to recent rate cuts in Canada, Denmark, and Europe. He anticipates a similar move from the US Federal Reserve due to weakening economic indicators.
While the Fed typically refrains from rate cuts during election years (May-November), Thielen argues that market sentiment and the perceived likelihood of cuts are crucial for risk assets like Bitcoin.
Ethereum’s Impact and Money Flow: Factors to Watch
Thielen also acknowledges the potential influence of Ethereum (ETH) on Bitcoin, particularly if its price experiences a sharp decline. Additionally, he stresses the importance of money flow indicators, suggesting substantial inflows are necessary for significant Bitcoin(BTC) price movements.
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The growing interest from institutional investors is another factor bolstering Bitcoin’s long-term prospects. Significant acquisitions by institutions and consistent inflows into US spot Bitcoin ETFs (exchange-traded funds) underscore this trend. These ETFs have witnessed inflows for a record-breaking 19 consecutive days, with BlackRock’s iShares Bitcoin Trust (IBIT) emerging as a dominant player.
Conclusion
The recent price dip reflects Bitcoin’s sensitivity to economic data. However, analysts like Thielen remain optimistic about Bitcoin’s long-term trajectory, citing factors like a potential easing cycle, supportive technical indicators, and growing institutional interest. While market volatility remains a concern, Bitcoin’s future appears to be shaped by a confluence of global economic forces and investor behavior.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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