Bitcoin Rallies Over 8% on Upbeat US Jobs Data and Bullish Signs

Bitcoin (BTC) staged a remarkable comeback on August 8th, surging over 8% within a 24-hour period. This sudden price jump follows the release of positive US labor market data, which seemingly calmed recession fears among investors.

Strong US Jobs Data Fuels Optimism

The key factor driving Bitcoin’s price increase appears to be the latest US jobs report. Data released on August 5th indicated a more robust labor market than previously anticipated. Initial jobless claims fell to 233,000 for the week ending August 3rd, defying expectations of a continued rise. This positive news instilled confidence in investors, alleviating concerns about a potential recession.

Economists like Joseph Brusuelas believe this signals a healthy labor market transitioning to a slower growth phase, with expectations of average monthly job claims hovering around 120,000 in the latter half of 2024. This improved economic outlook might be leading market participants to re-evaluate the need for aggressive interest rate cuts by the Federal Reserve.

Short Squeeze Boosts Price

Bitcoin’s price rise also coincided with a significant squeeze on short positions in the crypto futures market. Over $114 million in short positions were liquidated within 24 hours, compared to a lower $96 million in longs. This liquidation forced short sellers to buy back Bitcoin to cover their positions, further pushing the price upwards.

BTC Whale Accumulation and Exchange Outflows Hint at Long-Term Bullishness

The recent market downturn seems to have attracted large investors, often referred to as “whales.” According to market intelligence firm Santiment, these whales took advantage of the dip below $50,000 and actively accumulated Bitcoin.

Furthermore, onchain data reveals a steady decline in Bitcoin reserves on exchanges, reaching a five-year low of 2.68 million BTC. This suggests investors are transferring their holdings to personal wallets, potentially with a long-term bullish perspective and no immediate intention to sell.

Russia Legalizes Crypto Mining, Adding to Positive Sentiment

The recent legalization of cryptocurrency mining in Russia further bolstered the positive sentiment surrounding Bitcoin. This move allows registered entities and individual miners with energy consumption restrictions to participate in mining activities. Additionally, the new law creates a framework for trading foreign digital assets on Russian blockchain platforms with regulatory oversight.

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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