Why is Bitcoin price up today?

Bitcoin prices rise towards $60,000 as numerous crypto market indices indicate an uptick in investor sentiment.  On August 8, Bitcoin $60,898 rose beyond $5,100, bringing its 24-hour advances to 8.3%. Strong US labour market data could have played a significant influence in this turnaround.

According to data from Cointelegraph Markets Pro and TradingView, Bitcoin increased from a low of $54,748 on August 8 to an intraday high of $59,889. Bitcoin was trading at $5.

Strong US labor market data calms recession fears

The most recent data on the US labour market, issued on August 5, revealed that the economy may not be heading for the recession that market investors anticipated.

According to Department of Labour data, 233,000 initial jobless claims were made between July 28 and August 3, down from 250,000 the previous week, when unemployment claims reached their highest level since August 2023. “US weekly unemployment claims decrease from an 11-month high. Claims declined to a seasonally adjusted 233,000 for the week ending August 3, 2024.

Economists projected 240,000 new unemployment claims for the week ending August. “It’s a healthy labor market that is likely to grow at a slower pace,” said economist Joseph Brusuelas in an Aug. 8 article on X, expecting an average of 120,000 new job claims per month in the second half of 2024.

Given all available evidence, the overall US economic forecast remains favorable, implying that market participants may be overvaluing aggressive easing once more as they anticipate the first interest rate decrease in September. The CME FedWatch program, for example, predicts a 100% chance of a 25 to 50 basis point (bps) rate drop in September.

Over $110 million leveraged longs liquidated

Bitcoin’s price increase today comes after large liquidations of short bets in the cryptocurrency futures market. Notably, the broader market saw approximately $114.40 million in short liquidations in the last 24 hours, versus $96.96 million in long liquidations. Similarly, more than $46.24 million short BTC holdings were liquidated within the same period, compared to $26.49 million short liquidations.

Short liquidations happen when traders are obliged to sell their assets to liquidate their long positions, increasing selling pressure in an already unfavorable market. Interestingly, eliminating short positions correlates with an increase in Bitcoin futures open interest (OI) and financing rates. The increase in funding rates and OI suggests that traders are again taking new risks, reflecting a more positive market outlook.

Whale accumulation backs Bitcoin’s upside

According to market intelligence service Santiment, Bitcoin whales took advantage of the drop below $50,000 and purchased more BTC on dips in response to the market’s recent decline.

The analytics firm found that addresses holding between 10 and 1,000 BTC “rapidly accumulated” as BTC fell below $50,000. In an Aug. 7 post on the X social network, Santiment stated that August 5th and 6th saw the highest amount of Bitcoin whale transactions since the first week of April. According to the total holdings of wallets with 10 to 1,000 BTC, they quickly accumulated during the price drop, which saw crypto’s top asset fall below $50,000.”

Overall, this is a good indicator because sustained accumulation indicates a bullish attitude among this group of investors. According to additional data from on-chain metrics analytics firm CryptoQuant, the BTC balance on exchanges has fallen to a five-year low of 2.68 million BTC after plummeting 10.9% in the last 90 days.

Decreasing BTC balances on exchanges simply indicates that investors are withdrawing their tokens into self-custody wallets, indicating that they do not intend to sell in expectation of a future price gain.

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