Bitcoin Hits $62K as Cryptos Bounce; Correction Likely Over But Expect a ‘Slow Grind Higher,’ Arthur Hayes Says

Bitcoin rose nearly 5% following soft US employment data.

Coinbase analysts said the dovish Fed meeting results mean the US dollar’s rise has likely peaked and is helping cryptocurrencies.

Cryptocurrencies jumped on Friday, led by Bitcoin’s {{BTC}} surge, sparking hopes that the worst of the decline may be over.

BTC rose nearly 5% to above $62,000 in U.S. morning trading following a colder-than-expected April jobs report that eased concerns about higher interest rates. At press time, Bitcoin was changing hands at $61,600, up 4.4% and outperforming the broad market CoinDesk 20 Index (CD20)’s 3% rise in the last 24 hours.

Ether {{ETH}} has reclaimed the $3,000 level and is up 3% over the same period; Altcoin majors dogecoin {{DOGE}}, shiba inu {{SHIB}} and Near Protocol’s NEAR increased by 5%-10%.

The rise came as the U.S. economy added 175,000 jobs in April, according to the government’s Nonfarm Payrolls Report; That figure was below analysts’ estimates of 245,000 and the previous month’s estimate of 315,000. It also showed that the unemployment rate rose to 3.9% from 3.8% in March.

Following the report, market participants said the probability of at least one rate cut by September rose to 68% from 57% a week ago, CME FedWatch data showed.

Read more: Bitcoin’s Recent Weakness Is More Tied to Global Markets Than Anything Crypto-Specific, Coinbase Says

Bitcoin’s correction since mid-March has coincided with growing concerns that Federal Reserve policymakers have adopted a more hawkish stance in the face of sticky inflation in recent months; Some traders are even discounting the possibility of any rate cuts this year. This helped the US dollar index rise to its highest level since November and generally signals bearishness for risky assets like crypto.

In addition to the soft employment data, Coinbase analysts David Han and David Duong also noted this week’s FOMC meeting; At this meeting, policymakers indicated that they had no interest in cutting interest rates, but that the central bank was slowing the pace of balance sheet flows (often referred to as quantitative). tightening (QT) campaign is seen as a dovish signal.

“We believe the FOMC’s more dovish-than-expected statement marks the peak of the USD’s bullish momentum against both FX currencies.” [foreign currencies] and crypto pairs,” Han and Duong wrote.

Arthur Hayes, former CEO of crypto exchange BitMEX, said in his latest article earlier Friday that Bitcoin has likely fallen to this week’s low of $56,000, but as markets cool, investors should expect a gradual rise rather than a rapid rebound to March highs. He warned about. for the next few months. “Did Bitcoin hit a local low? […] “Earlier this week,” Hayes asked. “Yes,” he concluded. “I think prices will bottom out, drop, and slowly start to rise.”

Talking about what’s next, he predicted “a rally above $60,000 followed by limited price movement between $60,000 and $70,000 by August.”