On Monday, the price of Bitcoin surpassed $85,000, briefly even reaching the $87,000 mark. This occurred as traders analyzed the latest U.S. employment reports, which came in worse than expected. The situation is complicated by high government bond yields and inflation fears.
At 09:27 Moscow time, Bitcoin was up about 1.1%, trading at $85,929.4, although during the current session the price had risen as high as $86,995.4.
The cryptocurrency has so far been unable to hold above $87,000. A similar situation occurred last Friday immediately after the release of labor market statistics.
Difficulties in Breaking Through the $87,000 Level
Data from last week showed that only 29,000 jobs were created in the U.S. in September, which came as an unpleasant surprise to the market. In addition, figures for the previous two months were also revised downward.
As a result, many began to believe that the Federal Reserve is unlikely to raise interest rates at its October meeting. According to CME FedWatch data, the market currently estimates the probability of a rate hike at less than 20%, which is significantly lower than last week’s figures.
The weak labor market has actually supported risk assets, as expectations of tighter monetary policy have eased. Bitcoin typically reacts sensitively to changes in liquidity. On Friday, it briefly broke through the $87,000 mark, but then gave up some of those gains as bond yields rose.
The yield on 10-year U.S. Treasury bonds initially fell below 5.17% following the report’s release but then rose to 5.28%. This continues to put pressure on cryptocurrencies and other risky assets. Investors are currently acting cautiously: they do not believe that a single poor report will prompt the regulator to immediately ease policy, especially when inflation remains a concern.
Another obstacle is the strong dollar. When the U.S. currency rises, dollar-denominated assets become less attractive to foreign investors.
However, there is a positive factor: funds are flowing into U.S. spot Bitcoin ETFs. According to SoSoValue, $102.7 million flowed into the funds on October 1, and by October 2, the net inflow had already reached $189.8 million.
Currently, Bitcoin’s growth is being held back by macroeconomic factors. For example, oil is trading above $100 per barrel due to the situation in the Middle East. This raises concerns that high energy prices will fuel inflation and prevent the Fed from beginning to ease monetary policy.
Most likely, in the near future, everyone will be watching to see if Bitcoin can hold above $87,000. If this level is breached, talk of a rise to $90,000 will become quite realistic.
What’s happening with the rest of the market: altcoins are rising, Cardano jumped 10%
Ethereum, which ranks second by market capitalization, gained 0.7% and is trading at $2,715.88.
XRP, ranked third, rose 1.3% to $1.52.
Solana remains at the same level, while BNB showed a slight increase of 0.6%.
Cardano surged significantly, jumping 10.6% to $0.2707, a long-time high.
In the meme coin segment, Dogecoin also rose by 3.1%.