Bitcoin Rally Up to $125K has been slowed by weak jobs data and traders’ fear

The key takeaways

• Bitcoin’s resilient performance after its $19 Billion flash crash Friday shows the long-term market demand continues to be strong despite short term risk aversion.

• Negative funding rates and arbitrage opportunities signal a higher counterparty risk for derivatives traders.

BitcoinBTCThe BTC Futures Open Interest (BTC) was reduced by $15 billion after Friday’s Flash Crash. Bitcoin’s resilience was impressive after such an important liquidity event. Nevertheless, several factors may delay another attempt to reach the $125,000 mark.

So long as investors view Bitcoin as an asset of risk and continue its partial correlation to tech stocks, a sustained bullish trend will depend on a stronger belief in the global economic recovery.

Bitcoin prices are negatively affected by US data on the job market and US China relations

Investors have become more cautious due to concerns about an economic slowdown. This is especially true after recent signs of weakness on the US labour market. Carlyle estimated that US employers created 17,000 new jobs in September. This is down from the already weak 22,000 added in August. according The Wall Street Journal

The demand for US government bonds soared as investors opted for lower returns to ensure the security of assets backed by governments. It was further influenced by the growing concern that the US-China trade war could worsen on Nov. 10 when the temporary ceasefire limiting US tariffs to imports will expire.

On Sunday, Donald Trump of the United States wrote in Truth Social that an extension was possible. “should be worked out” As both countries strive for economic growth. There haven’t been any concrete announcements made beyond the plans to meet.

US Treasury Secretary Scott Bessent referred to China’s export restrictions on rare earths as “provocative.” According to new Chinese regulation, companies that produce certain materials, but are not Chinese, will need to apply for an additional license. China is still the dominant player in these crucial markets. according Reuters.

The ongoing US shutdown has created additional macroeconomic uncertainty, as it has delayed key data releases, such as the Consumer Inflation Report and Wholesale Costs. The lack of clarity has complicated the outlook of the US Federal Reserve and made investors risk-averse in advance of Fed Chairman Jerome Powell’s Tuesday speech.

Risk of regulatory insecurity and liquidity gaps with BTC derivatives

Even if the US-China relationship improves, traders are still very cautious. Bitcoin derivatives. Arbitrage is still possible on some markets, for example the difference between spot and perpetual contract prices at the same exchange. Market makers’ limited activity signals increased counterparty risk.

Bitcoin perpetual futures funding rate Binance’s leverage is still negative. This means that shorts, or bearish positions, are paying for it. On other exchanges the indicator is back to its normal range of positive values, creating arbitrage possibilities on rate.

Joe McCann is the founder and CEO Asymmetric Financial. He said in an interview on X, that “a very large market maker” The sharp price differences across the exchanges would have resulted from the massive losses that occurred during the crash on Friday. “insane dislocations” Binance. These assumptions may be temporary, but traders will wait longer to return to the crypto market.

Related: Centralized exchanges face claims of massive liquidation undercounts

Market participants have criticized the way exchanges handle liquidation triggers, derivative pricing and other aspects. CrypThe following are some of the ways to get in touch with us:.com CEO Kris Marszalek urged regulators to “conduct a thorough review of the fairness of practices,” Pointing out that only some users experience downtimes and the lack of compliance measures “internal trading.”

Bitcoins’ unique characteristics, which enable it to potentially profit from increasing demand for independent rare assets, have not been affected by the flash crash of Friday. The traders’ appetite for short-term risks has decreased, and this could cause the trip to new highs by several months or weeks.

This article was written for general informational purposes. It is not meant to provide investment or legal advice. These are solely the opinions, views, and thoughts of the author and may not reflect the opinions and views of Cointelegraph.