Bitcoin has recently surged toward a target of $118,000, marking its highest level since mid-August. Recent economic data and analysis suggest that this movement is largely driven by a weaker US labor market, which tends to favor crypto and risk assets.
Bitcoin’s Price Movement
Data from Cointelegraph Markets Pro and TradingView indicated that Bitcoin (BTC) reached $117,713 shortly after minimal jobs growth was reported in the United States. This figure is just $150 shy of surpassing its September peak. A popular trader, known as Rekt Capital, noted that Bitcoin is actively attempting to break out of its range this October.
Impact of Labor Market Weakness
- US private-sector employment growth fell significantly short of expectations in September.
- Analysts had anticipated an increase of 45,000 jobs, but the data showed negative growth.
- This labor market weakness may drive interest rates lower, allowing for increased capital flows into cryptocurrencies.
CME Group’s FedWatch Tool has indicated that market expectations are leaning toward a potential rate cut of 0.25% in the upcoming October Federal Reserve meeting.
Technical Analysis and Market Sentiment
Traders are optimistic about Bitcoin’s potential, with some urging caution regarding a key short-term support level at $112,000. Daan Crypto Trades remarked that sustaining above this threshold could signal further upward movement for BTC.
Responses to the US Government Shutdown
Despite the initiation of a US government shutdown, analysts believe it will have minimal impact on the current market. QCP Capital described the shutdown as a “market non-event,” as essential services will continue and previous shutdowns have not significantly disrupted risk assets.
Historical Context
QCP cited that during the 2018 governmental shutdown, the S&P 500 ended up rising by 10%. Given Bitcoin’s correlation with stock market performance, any dips related to this shutdown are viewed as potential buying opportunities rather than risks to chase after price increases.
As Bitcoin continues to target $118,000, the coming days will be crucial for determining its trajectory amid these economic conditions and market sentiments. Investors are urged to conduct thorough research before making any investment decisions, considering the inherent risks associated with trading.
