Bitcoin Rally to $125K is Challenged by Weak Job Data and Traders’ Fear

Takeaways from the conference:

• 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 reclaimed $114,000 less than 48-hours after the Friday flash crash that wiped $15 billion off BTC open interest. Bitcoin showed resilience in the wake of such a significant liquidity event. However several factors may delay another attempt to reach $125,000.

Long as investors maintain their view of Bitcoin as a high-risk asset, and its partial correlation between tech stocks is maintained, sustained momentum in favor of the bulls will be dependent on increased confidence about global economic growth.

Bitcoin price is negatively affected by US employment data 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 were willing to accept lower returns, in exchange for the security of assets backed by governments. It was also prompted by concerns about the potential for escalation of the US-China trade war on Nov. 10 when the temporary truce that limits US import tariffs expires.

Donald Trump, US president, wrote Sunday on Truth Social about an extension. “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.” According to new Chinese regulation, companies that produce certain materials, but are not Chinese, will need a separate export license. China dominates these critical markets for tech manufacturing. according Reuters.

Further macroeconomic uncertainties stem from the US Government shutdown which has caused the delay in the release of important data such as consumer inflation and wholesale cost. 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. Arbitrage still exists on certain markets. For example, 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’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” 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

Market participants have criticized the way exchanges handle liquidation triggers, derivatives pricing and other aspects. CrypYou can also find out more about the following:.com CEO Kris Marszalek urged regulators to “conduct a thorough review of the fairness of practices,” Pointing out that certain users are affected by 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.