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

Takeaways from the conference:

• Bitcoin’s continued 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 a Friday flash 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, sustained momentum in favor of the bulls will be dependent on increased confidence about global economic growth.

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

The demand for US government bonds soared as investors accepted lower yields in exchange for a safer asset. This was also due to growing fears that trade tensions between China and the United States could escalate on November 10, when the temporary truce restricting US import tariffs expires.

Donald Trump, US president, wrote Sunday on Truth Social about an extension. “should be worked out” Both countries are pursuing economic growth. While the leaders of both countries have agreed to hold talks, there has been no other concrete news.

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 an extra export license. China is still dominating these markets that are crucial to the tech industry. according Reuters.

The US Government shutdown is causing further macroeconomic uncertainties, which have delayed the release key data such as consumer inflation and wholesale prices. 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. 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” This would explain why there are such large price disparities between exchanges. “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

Some market participants sharply criticised how exchanges dealt with liquidation triggers. 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,” The absence of measures to ensure compliance and the fact that certain users are affected by downtimes “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.

The article does not provide legal advice or investment recommendations and it is intended for informational purposes only. These are solely the opinions, views, and thoughts of the author and may not reflect the opinions and views of Cointelegraph.