Bitcoin Holds Above $60,000 as Dollar Surges Amid Market Turmoil

Bitcoin (BTC) managed to maintain support above the key $60,000 level on Thursday, even as many smaller cryptocurrencies tumbled amid broader market volatility.

Bitcoin Outperforms Altcoins

The world’s largest cryptocurrency was trading around $60,700 at time of writing, up about 1% over the past 24 hours. Bitcoin briefly dipped below $60,000 on Wednesday before rebounding to above $61,500 during Asian trading hours.

However, the broader crypto market showed weakness, with the CoinDesk 20 Index falling 1.5% over the same period. Major altcoins like Ethereum (ETH), Ripple’s XRP, Solana (SOL) and Avalanche (AVAX) all posted losses.

The divergence boosted Bitcoin’s market dominance – its share of the total crypto market capitalization – to above 58%, approaching a 3-year high according to analysts.

Dollar Strength and Geopolitical Tensions Weigh on Markets

The crypto market’s struggles came as the U.S. dollar surged to its strongest level since mid-August against other major currencies. A spike in key interbank lending rates also signaled potential liquidity stress in dollar markets.

“We saw more solid services data from the U.S., which pushed the U.S. dollar index closer to 102,” noted James Van Straten, senior analyst at CoinDesk. The strong economic data reduced expectations for interest rate cuts by the Federal Reserve.

Geopolitical turmoil, particularly escalating tensions in the Middle East, also weighed on risk assets like cryptocurrencies while boosting safe havens. Oil prices climbed near $74 per barrel, a one-month high.

Looking Ahead: Jobs Report and Market Outlook

Despite the short-term volatility, some analysts remain optimistic about Bitcoin’s prospects. “A combination of expected rate cuts and labor strength could boost risk assets,” crypto hedge fund QCP Capital said, looking ahead to Friday’s U.S. jobs report as a potential catalyst.

For now, Bitcoin continues to demonstrate relative strength compared to smaller digital assets as it holds above the psychologically important $60,000 level. However, traders are closely watching for any breakdown below this support, which could open the door to further declines.

The upcoming U.S. jobs report on Friday is expected to be a crucial data point for market participants, potentially influencing both traditional and crypto markets in the short term.