Bitcoin (BTC) continues to hold steady above crucial levels despite the release of strong US payrolls data, which has increased the likelihood of a Federal Reserve rate hike.
In a recent update, Wintermute reported that August payrolls exceeded expectations, with 162,000 jobs added compared to a consensus of 53,000. This positive data has raised the odds of a September rate hike to around 60%.
Bitcoin briefly reached $82,400 before retracing its gains, but it still managed to close the previous week above $80,000, marking a 3.45% increase. Wintermute also highlighted that Bitcoin exchange-traded funds (ETFs) saw inflows of $987 million last week, marking the third consecutive week of positive flows and bringing the total inflows close to $3.8 billion. Additionally, Ethereum ETFs received $215 million in inflows during the same period.
According to Wintermute, investors are shifting their capital from saturated equities and stagnant gold markets to Bitcoin and Ethereum.
“Crypto assets weathered the strong payrolls data better than traditional assets, with the money exiting gold and stagnant equities finding its way into BTC and ETH. This signals a potential shift in market dynamics as we enter a new cycle.”
Bitcoin’s recent 50% decline from its peak is less severe compared to the 75%+ corrections observed in 2018 and 2022 at similar points, indicating increased institutional involvement through ETFs.
“Market breadth is expanding, with profits from one sector fueling the next, a characteristic of an early market cycle. The market dynamics could change if a sector fails to perform or if major cryptocurrencies lose momentum without a new frontrunner…
Remaining cautiously optimistic, we would reassess our outlook if Bitcoin drops below $72,000 and ETF outflows turn negative, especially if inflation data pushes rate hike odds above 70%.”
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Image Credit: Midjourney
