Bitcoin recently hit a high of $61,600 during early trading in Europe. Investors are on edge as they await the U.S. Bureau of Labor Statistics to release the September jobs report.
At the moment, Bitcoin's price has pulled back slightly to around $61,300, showing a 1% increase for the day, according to CoinGecko.
Market experts believe this upcoming data could significantly impact the Federal Reserve's policies, which may, in turn, affect cryptocurrency prices.
Currently, Bitcoin is priced at $61,321.76, with a 24-hour change of +0.46%. Ethereum has also seen a small rise, up 1.1% to $2,375. However, both cryptocurrencies have faced declines over the past week. Bitcoin dropped 7%, and Ethereum fell 11%, based on CoinGecko’s data.
The September jobs report is scheduled for release at 8:30 a.m. ET. Economists expect it to provide insights into how aggressive the Federal Reserve might be regarding interest rate cuts in November. They predict a slight decline in new nonfarm payrolls from 142,000 in August to 140,000 in September. The unemployment rate is expected to hold steady at 4.2%.
The Federal Reserve's response to these numbers will be crucial for the crypto market. A stable economic outlook could lead to a more measured approach to rate cuts, which analysts believe might create a favorable environment for a rebound in crypto prices.
Despite the recent market turbulence, some analysts suggest that Bitcoin could be on the verge of a short-term recovery.
CryptoQuant's analysis of the Coinbase Premium Index shows that demand from U.S.-based investors remains strong. They noted, “The continued rise in demand from U.S.-based investors suggests renewed upward pressure.” The daily moving average has crossed above the weekly moving average, a pattern that often leads to price increases.
This observation aligns with the current market conditions. Bitcoin recently corrected from $66,000 to $61,000 at the start of October. CryptoQuant's analysis indicates that these conditions could signal a short-term recovery for Bitcoin's price.
However, recent ETF flows indicate a market in transition.
On October 3, U.S. Bitcoin spot ETFs experienced a third consecutive day of net outflows, totaling $54.1 million. Specifically, (FBTC) saw outflows of $37.2 million, while (ARKB) recorded a significant outflow of $57.9 million, according to SoSo Value data.
In contrast, (IBIT) reported inflows of $35.9 million, suggesting that some investors still see value in Bitcoin amid the broader sell-off. Meanwhile, Ethereum spot ETFs reported total net outflows of $3.1 million, highlighting cautious investor sentiment across major cryptocurrencies.
Analysts at 10x Research offer a cautiously optimistic view, suggesting that the current sell-off may be nearing its end. They point out that Bitcoin has a history of corrections reversing between the 5th and 7th of each month, hinting that a turning point could be near.
They stated, “The early-month sell-off is nearing its end, as lows typically occur between the 5th and 7th of each month.” They also mention that weak ISM manufacturing data and concerns over U.S. employment have contributed to recent market declines. However, they argue that “evidence is growing that U.S. economic growth remains solid,” which might lead to a more gradual rate-cut cycle by the Federal Reserve.
Meanwhile, institutional investors, particularly OTC desks, have played a significant role in the recent market movement. Data shows these desks have been actively selling Bitcoin, contributing to its price drop from $65,000 to $61,000. However, as balances on these desks begin to rebuild, the sell pressure appears to be easing.
10x Research adds that investor sentiment seems relatively calm. Implied volatility remains low, and demand for put options is minimal, suggesting limited concern over further downside risks. Their analysts note that this view aligns with the historical trend where liquidations in Bitcoin futures often signal market lows, hinting that the current sell-off might be winding down.
In other news, crypto exchange Binance is reportedly losing its competitive edge as it faces regulatory challenges globally, according to a new report from digital asset data provider CCData. The report, released on October 3, reveals that Binance processed 36.6% of the volume for spot and derivatives trading on centralized platforms in September. This is about 22% more than its closest competitor, OKX. Binance's spot trading volume fell by more than 20% last month, resulting in a 27% share of the spot market.
In an interesting turn, a buyer of a new Solana meme coin called Pochita turned $140 into $450,000 in less than 24 hours without selling most of the coins. The coin surged after the owner of a popular meme dog, which inspired Solana’s BONK coin, adopted a new furry friend named Pochita. This news prompted various crypto enthusiasts to create numerous meme coins inspired by the dog, with one token quickly emerging as the favorite.
Lastly, Grayscale has launched a fund that provides investors exposure to AAVE, the token behind the Ethereum-based decentralized lending protocol Aave, which ranks as the 44th largest cryptocurrency by market cap. The Grayscale Aave Trust allows investors to buy shares that track the price of the asset. It will operate like a closed-end fund, not an exchange-traded fund (ETF), similar to those Grayscale offers for Bitcoin and Ethereum following SEC approvals this year.