Bitcoin's price, currently around $35,000, stands at a pivotal point influenced by the Federal Reserve's evolving stance. Weaker U.S. job data, with only 150,000 new positions added in October compared to 297,000 in September, is fueling expectations of a pause in the Fed's rate hikes.
Bitfinex's Alpha report attributes this shift in sentiment to tightening financial conditions, particularly the impact of rising bond yields. Traders now place a 90.4% likelihood on the Fed maintaining interest rates in December, up from 80% before the payroll data release.
Analysts also note that the jobs data indicates a potential easing of wage-driven inflation pressures, aligning with the Fed's decision to halt interest rate hikes. This aligns with the Federal Open Market Committee's choice to retain the federal funds rate within the 5.25% to 5.50% range, emphasizing a cautious approach.
CTF Capital supports Bitfinex's view on interest rates, suggesting the market anticipates an extended pause in rate hikes in the coming months. Interest rate futures hint at the possibility of the first rate cut by mid-2024. This overall sentiment that the Fed may be done with rate hikes is likely to boost cryptocurrency performance and U.S. equities.
Bitcoin's price has stabilized around $35,000, indicating a temporary pause in its recent uptrend. However, some indicators suggest potential challenges. Bitcoin's Network Value to Transactions (NVT) signal has reached an overvalued level, historically leading to further price gains and the onset of a bull market. Still, it's essential to consider other metrics to gauge potential price corrections.
Data shows BTC exchange reserves are increasing, signaling heightened selling pressure. The aSORP (Amplified Supply Overhang Percentage) is in the red, suggesting investors may be selling for profit, potentially signaling a market top during a bull market.