Cryptocurrencies saw a sudden surge in their value during the last hours of trading on Friday. This surge was led by Bitcoin, which witnessed a significant improvement after it had come close to falling to levels below $90,000. Investors were quick to strengthen their buying positions to take advantage of the low prices reached by this major digital currency, which topped the list of digital assets.
Bitcoin rebounds towards $94,814
By 11:50 AM Mecca time, Bitcoin rose by 1.77% in the past 24 hours, reaching $94,814. This increase came after a sharp decline in its value, as Bitcoin had fallen to levels of $91,000, which are levels that it has not seen in more than a month. This decline is due to profit-taking operations that took place after the currency recorded a record level exceeding $108,000 last month. Despite this surge, some other cryptocurrencies also registered notable gains, such as Cardano, which rose by 4.3%, and Dogecoin, which rose by 1% to 33.66 cents. However, the trading volume in the cryptocurrency market remained in a state of decline, falling by 4.2% to reach $152.5 billion in the past 24 hours.
Why Bitcoin’s Momentum Slowed
The success of Bitcoin funds in the United States contributed to pushing the digital currency to record levels, and former US President Donald Trump’s public support for the digital asset sector also played a significant role in pushing Bitcoin to new levels. However, the upward momentum has started to slow down significantly since the beginning of the year, which has raised concerns among some investors.
Demand for Put Options is on the Rise
Nick Forster, founder of cryptocurrency trading platform Derive.xyz, notes that there is a growing demand for put options as a hedge against a potential Bitcoin price decline
Job Report Expectations and Its Impact on Bitcoin
Forster believes that this increase in demand reflects growing concerns that Bitcoin is entering a correction wave. With the market expecting increased volatility, demand for these options could continue to increase.
Expectations are growing for the upcoming US jobs report, with investors counting on its analysis to determine financial market trends. Some analysts suggest that positive results could boost optimism about the stability of the economy, which could support the prices of riskier assets such as Bitcoin. On the other hand, any data indicating a slowdown in the labor market could put pressure on cryptocurrencies, increasing investor caution. If the numbers show rising unemployment or weak job creation, concerns about an economic recession could increase, putting pressure on Bitcoin and leading to additional price volatility
Bitcoin faces challenges in maintaining upward momentum
Despite Bitcoin’s strong start to 2024, during which the price of the currency approached the $100,000 mark, the major digital currency faces significant challenges in maintaining this momentum. Earlier this week, Bitcoin ETFs in the United States saw a net outflow of investors of $583 million, marking the second largest wave of outflows since the launch of these funds a year ago.
Economic data’s impact on market expectations
Despite Bitcoin’s strong start to the year, the slowdown in momentum may be due to the impact of recent economic data on monetary policy expectations. According to economic data released earlier this week, expectations for the Federal Reserve to cut interest rates in the near future have diminished. This has negatively affected riskier assets such as Bitcoin, as many investors consider that high interest rates make investing in digital assets more expensive.
Decrease in trading volume
Despite the sudden rise in the price of Bitcoin, the trading volume in the cryptocurrency market witnessed a decline of 4.2%. This decline may indicate that the markets remain cautious about the future, especially in light of the unexpected economic fluctuations. Investors in the cryptocurrency market are awaiting more signals from the macroeconomics, especially from the US jobs report.
Bitcoin between optimism and caution
Despite the challenges facing Bitcoin, there remains a state of cautious optimism among investors. The major digital currency has witnessed severe fluctuations in its value over the past months, and some believe that this fluctuation may be normal in such markets. However, the ongoing fluctuations may make it difficult for new investors to determine the next direction for the price of Bitcoin. This may be attributed to fears that Bitcoin will enter a corrective wave soon.
The success of these funds, in addition to the public support of US President-elect Donald Trump for the digital assets sector, contributed to pushing Bitcoin to new levels in 2024, but the upward wave has begun to slow down since the beginning of this year. Bitcoin is still facing significant challenges to maintain its upward momentum, amid declining trading volumes and growing concerns about rising market volatility. Although the major digital currency
has seen a significant increase in its value recently, there are doubts about its ability to maintain these gains in the near future. Investors are closely following economic data and employment reports in the United States to assess whether they will help determine the future direction of the Bitcoin and other cryptocurrencies market.
Bitcoin remains at the heart of economic discussions, as it witnesses continuous fluctuations in its value. With expectations of rising volatility, the future remains uncertain for many investors in this volatile market.
