Bitcoin prices remained steady just above the $111,000 mark early Monday, reflecting a cautious investor sentiment despite a potential rate cut by the Federal Reserve. The cryptocurrency slipped 0.3% to $111,707 by 4:30 a.m. ET, still off its record peak of approximately $124,000. Ethereum also saw a decline, dipping over 3% to $4,296, while XRP managed to perform better, rising 2.5% to reach $2.91.
The backdrop for this market activity comes amid a disappointing U.S. jobs report from the Bureau of Labor Statistics, which revealed that only 22,000 jobs were added in August—significantly lower than the anticipated increase of 75,000. The unemployment rate has also climbed to 4.3%, marking the highest level in nearly four years. This lackluster employment data has fueled speculation for at least a 25-basis-point cut in rates, with some analysts even projecting a 50-basis-point reduction.
While global equities experienced gains on Monday, gold prices surged to a new high of $3,600. However, the cryptocurrency market did not react with the same enthusiasm. Data shows corporate crypto holdings have topped 1 million coins, but this growth may be slowing. Rachel Lucas, a crypto analyst at BTC Markets, pointed out this trend, stating, “Retail is buying, institutions are trimming, and ETFs are taking a nap.” She noted that while the weak U.S. employment data has raised expectations for the Federal Reserve’s easing stance, the market appears to have factored this in to some extent.
Lucas highlighted a pivotal resistance level for Bitcoin, stating that if it surpasses $113,000, it could potentially climb to levels of $115,400 and even $117,100. Analyst Michael Van De Poppe reinforced this sentiment, asserting that a Bitcoin breakout above $112,000 could serve as a significant catalyst for the broader market. On social media platform Stocktwits, retail sentiment towards Bitcoin and XRP lingered in the ‘bearish’ territory, while traders expressed ‘extreme bearishness’ towards Ethereum.
Political uncertainties in France and Japan have further dampened investor confidence, even though a growing number of Asian firms are showing an increased interest in cryptocurrencies. Hong Kong-based HashKey Group announced plans to launch its inaugural digital asset treasury, targeting an initial size of $500 million. Several companies are following suit by adding cryptocurrencies to their balance sheets, inspired by the success of U.S. software company Strategy, which is recognized as the leading holder of Bitcoin.
Both Bitcoin and Ethereum have shown notable resilience this year, recording gains of over 20% thus far, outperforming the S&P 500 and Nasdaq indices as well as the ETFs that track them. As the market navigates through these mixed signals, investor sentiment remains a crucial factor in shaping the future trajectory of the cryptocurrency landscape.
