The key takeaways
- The soft US job market data led to a capital rotation from AI overheated stocks into Bitcoins and gold.
- The Bitcoin Onchain Indicators point to a seller’s exhaustion, while the drop in oil prices allows for more money expansion.
Bitcoin recovered the $61,000 barrier following a disappointing US employment report. The worsening employment data made traders less confident of an interest rate increase from the US Federal Reserve in the near future. Nasdaq’s tech index fell, boosting hopes for a Bitcoin-friendly capital flow.
Nasdaq 100 Index futures (blue) vs. Bitcoin/USD (orange). TradingView
Bitcoin retreated from the $57.750 low set on Wednesday, as did the Nasdaq. Yahoo Finance reports that US non-farm employment increased only by 57,000 jobs in June, a far cry from the expected 113,000. US Labor Department revised April and May data downwards by 74,000 positions.
The gold price rose on Thursday, indicating a potential bullish trend for precious metals. CME reports that the CME attributed the drop in odds for Federal Reserve interest rates to be raised by September, to 54% (from 64% on the previous day), to weak economic indicators. FedWatch Tool. While crude WTI prices have stabilized at below $70 per barrel, this opens the possibility of economic stimulus measures.
Gold/USD vs. Crude WTI (teal) TradingView
After the Qatar Foreign Ministry quoted “positive progress” In the most recent round of talks between US and Iranian officials on Wednesday. The gold price recovered from the losses of 8% that it had accumulated in the previous two weeks. This could be a sign investors are anticipating a looser monetary policy, and a further expansion of FED’s balance sheet.
US Federal Reserve Total Assets, in USD Millions. Source: FED St Louis
Although its mandate permits it to buy $40 billion per month in short-term Treasuries, the Federal Reserve has not increased the size of its balance sheet. The weak job market and lower inflation pressures are seen by many as the catalysts. accelerated liquidity injectionIncentives to invest in precious metals and Bitcoin, as well as other scarce assets.
Bitcoin’s bottom flashing and AI overheated stocks collide
Traders have predicted that capital will shift to alternative assets due to the weakness in AI, particularly among chipmakers. Stocks in SanDisk and Seagate as well as Western Digital, Applied Materials, and Western Digital all saw losses that were at least 9% on Thursday. Bitcoin, on the other hand, is showing signs that sellers are exhausted two months after its rejection at $82,500.
Related: Bitcoin tops $60K amid Fed inflation talks–Is bull trap or $65K next?
Source: X/gaah_im
Gaah_im, an Onchain author and CryptoQuant analyst who writes for CryptoQuant, said Bitcoin’s profit-to loss ratio had reached its lowest point since 2022. It is now negative that the percentage of total supply used to calculate profit has fallen. This has historically been a sign of cyclical bottoms. “extreme precision,” The analyst. The data from onchain suggests further Bitcoin gains.
Bitcoin’s recent decline is due to traders’ dissatisfaction with Strategy. Holders faced dilution despite a healthy leverage of 8% and $56,8 billion enterprise value. This was due to the accelerated MSTR shares issuance. buy back some debt Dividends paid on preferred stock are covered.
In the event that weakness accelerates in the AI industry, some money may be redirected to gold or Bitcoin. This could lead to a recovery of $70,000 within a short time.
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Source: cointelegraph.com
