Bitcoin (BTC) jumped to a two-week high on Friday as crypto traders grew more confident that the market has stabilized following a recent slump and some analysts flagged the possibility of a short squeeze.
The bitcoin price rose 8.9% over the past 24 hours to about $40,219, pushing past the key psychological threshold of $40,000 for the first time since Jan. 22. The largest cryptocurrency remains well off its all-time high of around $69,000 reached in December.
“Several attacks on the downside have not been successful anymore as the risk has been taken out,” said Daniel Kukan, a senior trader at Crypto Finance AG.
Kukan said his next target for the price level on the upside is about $42,000 to $43,000. He sees market support at $33,000 – or $28,000 in the worst case, “which we have not touched.”
On an intraday basis, bitcoin has pierced above the top of its weeklong price range, after holding support above the $35,000 to $37,000 zone.
U.S. jobs report for January
Bitcoin dipped briefly after the U.S. Labor Department reported unexpectedly strong jobs growth in January, along with big upward revisions to the figures previously reported for 2021.
Theoretically, such a report would be negative for bitcoin, because the Federal Reserve might need to move more aggressively in hiking interest rates to keep the labor market from overheating. In general, bitcoin’s price has responded negatively to tighter monetary policy.
“Bitcoin’s initial knee-jerk reaction to the shockingly strong nonfarm payroll report was weakness,” said Edward Moya, senior market analyst at the foreign-exchange brokerage Oanda.
But he noted that “bitcoin has managed to stabilize despite rising inflationary pressures that continue to push global bond yields higher.”
The 10-year Treasury yield broke above a two week-long range of 1.92%. And the U.S. dollar also ticked higher over the past two hours, while stocks are roughly flat. Bitcoin often trades in sync with stocks.
Jason Deane, bitcoin analyst at Quantum Economics, said that “bitcoin’s recent moves do seem to have coincided with the latest U.S. jobs report, and it’s possible this may simply have acted as catalyst for an overdue market move.”
Separately, the market may have gotten an extra dose of bullishness when Marathon Digital Holdings, a bitcoin mining company in North America, said Friday it had increasing its holdings of the cryptocurrency to about 8,595 BTC ($338 million).
Laurent Kssis, a crypto exchange-traded fund (ETF) expert and director of CEC Capital, described that as a “mammoth increase.”
“I think this may well be related to the small push up,” Kssis said.