Bitcoin Retakes $23,000 as Crypto Rallies Before US Jobs Report - BLOOMBERG
(Bloomberg) -- Bitcoin lingered near $23,000 after a report showing the US added more jobs than forecast last month renewed concern that higher interest rates could reduce demand for riskier assets.
The largest cryptocurrency rose as much as 4.2% to $23,467 on Friday, before paring the increase. Bitcoin remains within the range of around $19,000 to $25,000 that’s held it since mid-June. Ether was up as much as 8.4% to $1,724 before also pulling back a bit from the highs of the day.
“That was not a good jobs report for risk assets,” Craig Erlam, markets analyst at Oanda, said in an email. “That could worsen any slump further down the road, which is why we’re seeing risk assets sinking and Bitcoin is very much among them. It’s still a little higher on the day, but it’s given back a fair bit of its earlier gains.”
Other coins remained higher, with Polkadot and Aave gaining more than 5%.
Cryptocurrencies have traded in tandem with risk assets for months, seeing high correlations with the NASDAQ 100 in particular. They’ve struggled as expectations for Federal Reserve rate hikes increased amid stubbornly high inflation, but have climbed off their worst levels of the past few months.
Nonfarm payrolls jumped 528,000 last month, beating all estimates and the largest increase in five months, Labor Department data showed Friday. Employment in the prior month was revised up to a 398,000 gain. The unemployment rate fell to 3.5%, matching a five-decade low. Wage growth accelerated and the labor force participation rate eased.
“The Fed is likely less concerned with recessionary conditions and more focused on their dual mandate of inflation and unemployment,” said Josh Olszewicz, head of research at digital asset fund manager Valkyrie Investments. Central bankers are “likely to continue with successive rate hikes,” reducing the allure of alternative assets.