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Bitcoin price overcomes $50K, stocks slide after disappointing US jobs report

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The S&P 500 slid to the intraday highs of Sept. 2 while Bitcoin (BTC) climbed to its highest levels in more than three months. The moves came as a key report on Sept. 3 showed that the United States economy added fewer jobs than anticipated, lowering the Federal Reserve’s likelihood to start unwinding its stimulus program this year.

The U.S. Bureau of Labor Statistics revealed that nonfarm payrolls (NFPs) grew by 235,000 in August, against expectations of 733,000 positions. Nevertheless, the unemployment rate inched lower to 5.2% from the previous month’s 5.4%.

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Delta variant FUD behind Bitcoin pump?

The hospitality and leisure sector saw no job gains in August, in contrast with its average increase of 350,000 positions per month over the previous six months. Meanwhile, the restaurant sector lost 42,000 jobs, signaling fears about the fast-spreading Delta variant of COVID-19.

Bitcoin rose by 3.41% to $50,961 in anticipation that a slowdown in the U.S. jobs sector would prompt the Federal Reserve to limit its taper tantrum.

Bitcoin 1-hour candle chart. Source: TradingView.com

The world’s best-known cryptocurrency struggled in the second quarter of 2021 amid a global economic rebound from the pandemic. It fell from around $65,000 to below $30,000 after facing additional headwinds from a full-fledged crypto ban in China and Elon Musk’s anti-Bitcoin tweets.

At the same time, the global economic recovery raised speculations that central banks would unwind their massive monetary support. In the U.S., Federal Reserve Chairman Jerome Powell said that the Fed would begin tapering by the end of 2021 if the economy achieves “maximum employment.”

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But the Delta variant keeps denting hopes of a steady economic and labor market recovery. Moreover, Sept. 3’s job data hints that the U.S. central bank will need to continue its $120 billion per month asset purchase program.

The outlook stressed the U.S. dollar lower and sent non-yielding hedging assets like Bitcoin and gold higher.

Bitcoin price daily chart vs. spot gold (XAU/USD) and the U.S. dollar index (DXY). Source: TradingView

“The cross-over above the $50,000 price mark has revealed two crucial discoveries for the digital currency,” said Petr Kozyakov, co-founder and CEO of payment network Mercuryo.

“One is that the premier cryptocurrency still has the inherent features that attract investors and buyers, and secondly, the increased price valuation has not yet eliminated the volatility that surrounds the digital asset.”

Kozyakov anticipated that loose monetary policies, coupled with Bitcoin’s growth as a recognizable financial asset on Wall Street, would push its prices to $55,000 in the near term and $70,000 in the long term.

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Unemployment benefits expiring soon

The extremely weak NFP report came just days before the scheduled termination of federal unemployment benefits that the U.S. administration put in place to cushion the economic damage caused by the pandemic.

Moreover, additional aid that gives unemployed Americans $1,200 per month will expire on Sept. 6. That will effectively remove aid to about 7.5 million people as Delta variant cases are rising in parts of the United States.

Goldman Sachs noted that unemployment benefits also kept Americans from applying for jobs throughout July. The banking giant forecasted the Sept. 6 termination to raise nonfarm payrolls to 1.5 million by the end of 2021.

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The next Federal Reserve meeting will take place in mid-September and is expected to shed more light on the Fed’s taper plans in light of the weaker NFP report.

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Bitcoin

Bitcoin Drops as China Declares Crypto-Businesses Illegal

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  • China declared that cryptocurrency-related businesses are illegal
  • Bitcoin, Ether, and stablecoin Tether do not qualify as legal tender in China
  • BTC drops in price as the announcement went out

Once again, China reiterated its antagonistic stance on Bitcoin and the cryptocurrency industry as a whole.

In an announcement, the People’s Bank of China (PBOC) mentioned that BTC, ETH, and USDT are not legal tenders in China. They added that these cannot be used in the currency market.

Additionally, the central bank deemed all crypto-related businesses as illegal. This includes overseas exchanges serving residents within China and derivative transactions.

Following the news, Bitcoin’s price fell by almost $2,000 as the news circulated. This has been a common pattern whenever China FUD comes out.

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Earlier, China also reiterated its stance on crypto trading and mining while testing the Digital Yuan. According to the PBOC, it will continue releasing regulatory pressure over the crypto trading industry.

Despite the negative news, many analysts remain bullish on Bitcoin and the cryptocurrency industry as a whole. According to analyst Lark Davis, this is not new and will happen again in the future.

In a tweet, Davis mentioned that “The year is 2025, #bitcoin has just corrected from 400k to 250k on China banning BTC fears.”

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Can Bitcoin Surpass $6,000,000? Ethereum and Polkadot Creator Details Possible Future of Crypto

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Early Bitcoin developer and co-founder of Ethereum and Polkadot, Gavin Andresen, is outlining a future where BTC rises to a staggering $6,000,000 per coin.

Gavin Andresen, who took over as Bitcoin’s lead maintainer from founder Satoshi Nakamoto in 2011, just published a new blog post detailing how BTC’s theoretical evolution could look.

Andresen describes a “possible” scenario where Bitcoin hits a price tag of $6,000,000 by 2061, transaction fees 326x higher than they are now, and the blockchain is used chiefly by whales.

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“Imagine: it is the year 2061. The BTC price is six million US dollars – equal to about a million 2021 dollars because of inflation.

Miners are being rewarded 0.006103515625 BTC per block, plus transaction fees of about 5 BTC for 4,000 or so transactions ($7,500 per transaction).

But most BTC transactions don’t happen on the BTC network. Most BTC is locked up in multi-signature outputs secured using multiparty computation and mirrored on another chain as ‘wrapped’ tokens.”

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In his scifi scenario, Andresen says those who do remain on Bitcoin’s network will be incentivized to keep it alive.

“The transactions that do occur on the main BTC network are high-value, mostly between super-whale-size holders…

These whales maintain the BTC network forever. They are the miners and the transaction creators; they don’t care how high transaction fees go, because they receive as many fees as they pay.”

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However, Andresen says that by 2100, even those users would likely leave the blockchain.

“In the year 2100 the whales notice that the mining reward is basically zero… Eventually, there are zero new BTC being produced on the BTC network, and zero BTC circulating on the BTC network. There is nothing left to secure, and the chain stops.”

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Top Analyst Maps Bitcoin and Cardano Price Trajectories, Warns Best Entry Point for ADA May Be Gone

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Top Analyst Maps Bitcoin and Cardano Price Trajectories, Warns Best Entry Point for ADA May Be Gone

Crypto trader Michaël van de Poppe is looking at what’s ahead for Bitcoin (BTC) and the smart contract platform Cardano (ADA).

The analyst tells his 420,000 Twitter followers that the best entry point for Cardano may be gone after the asset bounced off a key support level at $1.86.

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“If you want to get into Cardano, this was the region where you would want to get into it, and the higher low that might be created.

So based on the daily timeframe, the best entry might be gone, but you’re still getting a better entry than the ones who have been buying around $2.80.”

Van de Poppe is now looking to see if ADA can turn resistance at the $2.37 level into support.

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If the markets correct further, he is keeping an eye on the $2.15 level as a potential buy zone.

“When you’re looking at the four-hour time frame, I think you’re getting the exact same view as what you have right now on Bitcoin and [Ethereum], actually. So you’re going to look for an entry point which is around the fact of $2.15, so anything in this region might be a good entry point if we get a corrective move.”

Looking at the Bitcoin pair, van de Poppe thinks that ADA will most likely consolidate briefly after retesting support at its previous all-time high.

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“We can see that we’ve had a beautiful retest of the previous high here too, and therefore some consolidation is most likely going to take place before we’re going to have new impulse waves.

So both the USDT and BTC pair are looking for continuation, and I think that’s just great, and I think that’s just what we want to see with the markets right now.”

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