Crypto Market Makes a Comeback Fueled by Jobs Report and Rate Cut Hopes

After a difficult week due to geopolitical tensions, the cryptocurrency market made a strong comeback on Friday. Bitcoin, the main cryptocurrency, rose 2.29%, approaching the much-anticipated $62,000 mark. Ethereum (ETH) also saw gains, albeit more modestly, closing at $2,400.

What fueled the rally?

The rally can be attributed to two main factors:

Positive US jobs report: The release of a strong US jobs report on Monday sparked optimism in the market. The report showed the unemployment rate fell to 4.1%, indicating a strengthening economy.

Rate Cut Expectations: The positive jobs data led to a rise in US Treasury yields. This, in turn, has fueled speculation that the Federal Reserve could deliver another rate cut as soon as the 2024 election. While a half-point cut seems unlikely, a quarter-point cut is much more likely (around 89.7%) than the 2024 election next month.

Market Overview

As of Friday morning, the global cryptocurrency market cap stood at $2.14 trillion, reflecting a 1.85% gain. While Bitcoin is just below $62,000 at $61,570, it is important to note that it is still down 6% against the USD compared to last week.

Liquidation activity slows:

The market has also seen a decline in liquidation activity compared to the previous two days. In the past 24 hours, around $128 million in long and short positions were liquidated across various cryptocurrencies. While Bitcoin saw around $10 million in long positions liquidated, a slightly higher number of short positions were closed ($13.63 million). Ethereum has followed a similar trend. What does this mean?

The recent price increase shows a growing sense of optimism in the crypto market. Positive economic data and expectations of interest rate cuts could be influencing investor sentiment. While some liquidation continues, it appears to be tapering off, suggesting potential for market stability.

As we head into the weekend, it will be interesting to see if this uptrend continues. The coming days could bring new insights into investor sentiment and the overall strength of the recovery.