Bitcoin, The main cryptocurrency, It remains close to US$70,000 at all-time high levels, in the midst of a rally that returns it to the center of the scene. Can it reach the $100,000 mark that was so often anticipated?
US macroeconomic data seem to be behind this latest rise, which comes hand in hand with the advance in the price of gold and stocks. Billions of dollars have flowed into crypto structured funds (ETFs) in recent weeks.
The approval of 11 Bitcoin spot ETFs by the US Securities and Exchange Commission in late January had marked a watershed moment for the sector, following an 18-month crypto winter plagued by a series of bankruptcies and high-profile corporate scandals.
Net flows into the top ten US bitcoin spot funds reached $2.2 billion in the week ending March 1, with more than $2 billion going to BlackRock’s iShares Bitcoin Trust fund. according to LSEG data.
Bitcoin boosts the rest of the cryptocurrencies
Bitcoin’s rises, as usual, drive increases in some cases of other cryptocurrencies.
Tokens like Dogecoin and Pepe posted double-digit percentage gains on Friday morning, adding to the impressive rallies seen throughout the week.
Ethereum, The second largest cryptocurrency by market value, is up 16% so far this week, more than double that of its largest counterpart.
In fact, it was approaching $4,000 for the first time since December 2021. It is benefiting from growing expectations that the token will be the next to gain approval from the United States Securities and Exchange Commission to be offered through of exchange-traded funds.
Why are cryptocurrencies rising?
The surge in demand for Bitcoin ETFs approved in January has been the main catalyst for the token’s more than 60% rise this year.
The U.S. economy created more jobs than expected in February, while a rise in the unemployment rate for the first time in four months and downward revisions to job growth in previous months suggested signs of some softening in the labor market. US.
Data from the Bureau of Labor Statistics released Friday showed the labor market added 275,000 nonfarm jobs in February, far more than the 200,000 economists expected. Meanwhile, the unemployment rate rose to 3.9% from 3.7% in January. This is the first increase in the unemployment rate in four months, as it is at its highest level in the last two years.
Cryptocurrencies
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According to the report, 229,000 jobs were created in January, a figure lower than the 353,000 initially reported. In total, the reviews showed that 167,000 fewer jobs were added in December and January than expected.
Meanwhile, wages rose 0.1% monthly in February, slower than economists expected (0.2%).
Downward revisions to employment gains from previous months, coupled with lower-than-expected wage growth, led traders to conclude that the Federal Reserve will be less concerned about a strong labor market driving a resurgence in inflation. This would imply that the rate cut is closer.
Gold, technology stocks and, with them, the main cryptocurrencies reacted with increases to the publication of the data.
Bitcoin Predictions
“I think $80,000 by the end of the month is not crazy,” said Leo Mizuhara, founder and CEO of decentralized finance institutional asset management platform Hashnote. “I just think the FOMO players are coming. “ETFs have opened up the space to even more retailers,” Bloomberg quoted him as saying.
The latest changes in the position raise the possibility of a more sustained rally than during Tuesday’s rally, when the digital asset surpassed its previous all-time high set in late 2021. Lower volatility and leverage, as seen in options markets and futures, suggest that Friday’s price movement was driven by spot market demand. Retail investors typically purchase tokens on the spot market rather than using derivatives that help increase leverage.
The current rise in Bitcoin price appears to be more driven by the spot market as the market is much “healthier,” with less leverage compared to Tuesday, said Luke Nolan, research assistant at CoinShares asset manager. cryptographic.
“Open interest is still very high and there is still rampant speculation,” said Zaheer Ebtikar, founder of cryptocurrency fund Split Capital. “This is often the most difficult part of the cryptocurrency cycle, as Coinbase surpasses the direct listing price while Bitcoin hits a record high.
Source: Ambito
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