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By Francisco Rodrigues (All times ET unless indicated otherwise)
Bitcoin BTC$67,882.98 and the wider crypto market gained in the past 24 hours after January’s U.S. jobs report showed growth in many sectors of the economy was restrained even as the overall number trounced forecasts and dented hopes for near-term interest-rate cuts.
BTC advanced 1.25% over the period and the CoinDesk 20 (CD20) index added 1.18%. The resilience follows a punishing drop last week that saw the price of bitcoin plunge to near $60,000.
That selloff triggered $3.2 billion in realized losses, the largest in bitcoin’s history, overtaking even the 2022 Terra collapse, according to data from Glassnode. Data platform Checkonchain called it a “textbook capitulation event,” in which low-conviction holders sold off rapidly. Open interest also plunged, according to CoinGlass.
The remaining traders appear reluctant to sell even as interest-rate cuts appear to be more distant. Rate cuts drive down fixed-income product yields, making riskier assets more attractive.
Odds on the Fed lowering rates by 25 basis points next month have plunged to 7% from 18% on prediction market Polymarket and to the same level from 20% on rival Kalshi.
Bitcoin’s positive reaction suggests sellers are indeed running out of steam. That, coupled with a Crypto Fear & Greed Index pointing to the lowest level since the collapse of FTX in 2022, suggests the market bottom may be in the past.
That being said, tomorrow’s U.S. CPI report will provide the market with a clearer direction on what the Federal Reserve may do in the future. Stay alert!
Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today
For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead”.
For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead”.
For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead”.
