Bitcoin Rally Up to $125K Challenged by Weak Employment Data, Traders’ Fright

The key takeaways

• Bitcoin’s resilience following Friday’s flash crash of $19 billion shows that long-term demand is still strong, despite short term risk aversion.

• The derivatives market is still cautious. Arbitrage and low funding rates are signs of increased counterparty risks.

BitcoinBTC() has regained the $114,000 level less than 48-hours after Friday’s crash that wiped $15 billion off BTC open interest. Bitcoin has shown resilience following such a liquidity event. However, there are still several factors that could delay the retesting of $125,000.

Long as investors maintain their view of Bitcoin as a high-risk asset, and its partial correlation between tech stocks is maintained, continued bullish momentum depends on greater confidence in economic growth globally.

Bitcoin prices are negatively impacted 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

Investors accepted lower returns for government-backed assets in return for safety. It was also a result of 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 has described China’s restrictions on the export of rare earths to be “provocative.” China has introduced new regulations that require foreign firms producing certain materials to obtain an export licence, even if they are not involved in the production. China is still dominating these markets that are crucial to the tech industry. 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

The traders have remained cautious despite the prospect of an improvement in US China relations. Bitcoin derivatives. Some markets offer arbitrage possibilities, like the differences in spot and permanent contract prices. A lack of activity by market makers indicates a higher counterparty risks.

Bitcoin perpetual futures funding rate Binance is a negative exchange, which means shorts are required to pay leverage. On other exchanges the indicator is back to its normal range of positive values, presenting 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” On 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

Some market participants criticized exchanges for their handling of liquidation triggers as well as derivatives pricing. 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 downtime and ignoring 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 information purposes. It is not meant to provide investment or legal advice. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.