Cryptos continue to rise with an eye on U.S. jobs data
Is there a rally in the cryptocurrency market? Bitcoin (BTC) has continued to rise in the last day and is above $28,500 despite trading practically flat in the last few hours. For its part, Ethereum (ETH) has rebounded 5%, surpassed $1,900 and is already eyeing $2,000 thanks to the proximity of the Shanghai update, which will arrive next March 12. The market capitalization of the crypto market exceeds $1,200 billion today, on Wednesday.
"We continuing to see choppy trading around $28,000 in Bitcoin, a level reached in the aftermath of the mini-banking crisis and held onto ever since. Where it goes from here is hard to say as no one would be surprised to see another surge, but logic suggests a pullback would make more sense, and the technicals may back that up," explained Craig Erlam, senior analyst at Oanda.
Jason Pagoulatos, market analyst at Delphi Digital, stressed that BTC is in "a big area of significance." "It's kind of where Bitcoin was trading before Three Arrows Capital's collapse last year – that huge hedge fund liquidation event – so this area's going to be a tough spot for Bitcoin to get through," the expert stated, as he believes the interesting thing will be to see whether it will trade more in line with risk assets or gold.
Edward Moya, also a senior analyst at Oanda, believes that the reigning cryptocurrency "is hovering around the high end of its recent range as crypto traders await to see how it will benefit from the current banking crisis." All in all, this expert also believes that "Bitcoin bear case" is growing.
According to Moya, investors should monitor Bitcoin's price near the end of a Good Friday-shortened working week, and the Labor Department releases nonfarm payroll figures. "Bitcoin has had a key price barrier at the $30,000 level and if Friday’s NFP report shocks to the downside, we could see high-frequency trading systems and algos try to take advantage of any momentum opportunities," Moya added.
In this regard, data from the JOLTS job openings survey, which is widely followed by investors to determine developments in the U.S. labor market, was released Tuesday. The survey showed a decline in job openings to 9.9 million, while the consensus expected them to stand at 10.5 million. This is the first time the JOLTS figure has fallen below 10 million since May 2021.
"The data triggered heavy buying in U.S. Treasuries on expectations that the Federal Reserve (Fed) may consider ending its policy tightening," explains Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
All in all, this analyst believes that we are facing a dichotomy because, while this is "good news" for the Fed, by digging a little deeper into the data "we can't really say that the U.S. labor market is in bad shape yet."
For one thing, she noted, job openings remain at "It’s not because we are below the 10-million psychological mark that the US jobs market is collapsing," she explained. On the other, Ozkardeskaya added, the very same report yesterday also showed that hiring remained steady, and the number of layoffs fell while people voluntarily quitting their jobs rose.
"Today, the ADP report is expected to reveal around 208K new private job additions in the US last month. Any weakness in the data will clearly be cheered by the Fed doves and could lead to further weakness in the US treasury yields, whereas a stronger-than-expected ADP print could bring the Fed hawks back to the market," concludes Ozkardeskaya.
In other market news, there have been notable 4% rallies in Ripple (XRP) and Polygon (MATIC). Dogecoin (DOGE), meanwhile, has dropped nearly 2% after soaring thanks to speculation fueled by Musk and Twitter.