Bitcoin Price Rises Amid Fed Tightening Halt

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Bitcoin price has experienced minimal upward momentum following the release of the disappointing U.S. nonfarm payrolls (NFP) data on Friday. Despite this, market sentiment remains optimistic as the weak data implies a halt to Federal Reserve tightening.

Greg Magadini, director of derivatives at Amerdata, expressed a bullish outlook on BTC, attributing the potential for continued gains in the cryptocurrency to Friday’s payrolls figure and the recent decline in stock market volatility indices.

The Labor Department’s employment report revealed that job creation in October slowed to 150,000 jobs, compared to the 297,000 jobs added in September. Furthermore, the jobless rate rose to 3.9% while wage growth, as measured by average hourly earnings, softened, indicating continued disinflation.

These figures make it more likely that the Federal Reserve will refrain from raising interest rates further, which is viewed as a positive development for risk assets, including cryptocurrencies. The central bank’s previous rate hikes were aimed at curbing inflation and were partly responsible for the crypto market’s decline last year.

Magadini highlighted that the NFP print was accompanied by downward revisions for both September and August. Positive trends in consumer price index (CPI) and hourly earnings further support the Fed’s ability to maintain a dovish tone.

Decreasing Volatility Supports Bitcoin Price

The potential for Bitcoin’s continued upside is also supported by the decreasing volatility in U.S. stock and bond markets. The S&P 500 VIX indicator and the MOVE index, which measures volatility in the Treasury bond market, have both experienced significant drops in recent trading days. This reduction in volatility relieves liquidity stress in the global market and encourages risk-taking.

Magadini noted that the market’s focus has shifted away from tensions in the Middle East, possibly contributing to the relief rally for risk assets. He expects this trend to continue, especially considering the substantial week-over-week drop in VIX and VVIX, as well as the anticipated end-of-year rally in Q4.

Bitcoin Price Performance

Currently, Bitcoin is trading at $34,890, reflecting a 0.4% decline for the day. Over the past four weeks, prices have gained nearly 25%, reaching highs above $36,000 at one point.

The positive sentiment in the market, along with the declining volatility in stock and bond markets, supports the potential for the Bitcoin price to continue its upward trajectory. Market participants are likely to keep a close eye on further developments in the U.S. economy and Federal Reserve policy, as these factors will play a crucial role in determining the future direction of the cryptocurrency.

In conclusion, the Bitcoin price has shown little upward momentum following the release of disappointing U.S. nonfarm payrolls data on Friday. However, the weak data, combined with decreasing volatility in stock and bond markets, suggests a more optimistic outlook for the cryptocurrency. Market sentiment remains positive as the weak data implies an end to Federal Reserve tightening, which could lead to further gains in the Bitcoin price.