Bitcoin (BTC) has recently experienced a period of volatility as its price touched a crucial resistance level at $28,000. This occurred amidst a backdrop of both the cryptocurrency and traditional markets recovering from initial losses due to better-than-expected U.S. employment data.
Bitcoin, the largest cryptocurrency by market capitalization, dipped nearly 2% below the $27,300 mark following the news that the U.S. economy added 336,000 jobs in September, almost doubling economists’ expectations. However, Bitcoin’s decline was short-lived as it quickly rebounded above the $28,000 mark.
Simultaneously, the U.S. stock market also made a recovery after an initial sharp decline, with the Nasdaq index surging 1.75% just before the end of Friday’s trading session.
Rachel Lin, the CEO of the SynFutures decentralized derivatives exchange, mentioned in an email that both the 200-day moving average and the 200-week moving average are currently around $28,000, acting as strong resistance levels for any Bitcoin price rallies. Lin stated, “Therefore, Bitcoin experiences significant selling pressure whenever it approaches this area.” “A sustained break above $28,100 would be a positive sign and could push Bitcoin to $30,000.”
Lucas Outumuro, Head of Research at IntoTheBlock, noted in a market report on Friday (6/10) that Bitcoin has been behaving differently in recent bond sell-offs compared to last year. Outumuro said, “Many factors that caused Bitcoin’s decline in 2022 are no longer as effective.” He explained that when the Federal Reserve raised interest rates last year, the value of long-term bonds decreased, putting pressure on risk assets like Bitcoin. As interest rate hikes slowed down and speculation about the Fed’s pivot in policy began earlier this year, long-term bonds and Bitcoin both increased in value.
Now, the relationship between these two assets has changed, with Bitcoin surging even as long-term bond prices decline. Outumuro mentioned, “The market seems to be reevaluating Bitcoin’s value in the context of global instability.”
Michael Silberberg, Head of Investor Relations at cryptocurrency hedge fund AltTab Capital, commented, “Bitcoin’s recent price stability during the bond and stock sell-offs has highlighted its increasing role as an independent asset.” “This separation marks further development in the narrative of Bitcoin as ‘digital gold’.” Silberberg added, “If it continues to trade in a narrow range while stocks and bonds are being sold off, it will strengthen this narrative and is likely to attract more institutional capital looking for uncorrelated assets.” “We expect this new phase to mark the beginning of a long-term uptrend over the next 4-6 months.”