On Aug. 8, Bitcoin BTC $60,623 rallied over $5,100, pushing its 24-hour gains to 8.3%. Strong United States labor market data may have played a major role in this recovery.
Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin rose from a low of $54,748 on Aug. 8, rallying as much as 9% to an intraday high of $59,889.
Let’s have a closer look at the factors driving Bitcoin price up today.
Strong US labor market data calms recession fears
The latest data on the US labor market, released on Aug. 5, suggested that the economy may not be heading into a recession that market participants feared.
The data released by the Department of Labor showed that 233,000 initial jobless claims were filed during the July 28 to Aug. 3 week, down from 250,000 the week ending July 27, when jobless claims hit their highest level since August 2023. Economists had expected 240,000 initial claims for unemployment insurance for the week ending Aug. 3.
“It’s a healthy labor market that is likely to grow at a slower pace,” wrote economist Joseph Brusuelas in an Aug. 8 post on X, forecasting an average of 120,000 initial job claims per month during the second half of 2024.
Considering all data, the overall US economic outlook remains positive, suggesting that market participants may be overvaluing aggressive easing once again as they expect the first interest rate cut in September.
Data from the CME FedWatch tool, for instance, shows a 100% probability of a 25 to 50 basis point (bps) rate cut in September.
Over $110 million leveraged longs liquidated
Bitcoin’s price rise today follows massive liquidations of short positions in the crypto futures market.
Notably, the broader market witnessed over $114.40 million in short liquidations in the past 24 hours, compared to $96.96 million in long liquidations. Similarly, more than $46.24 million short BTC positions have been liquidated over the same period, against $26.49 million short liquidations.
Short liquidations occur when traders are forced to sell their assets to exit their long positions, which increases the selling pressure in an already bearish market.
Interestingly, the wipeout of short positions coincides with an uptick in Bitcoin futures’ open interest (OI) and funding rates. Additional data from Coinglass reveals that the total number of BTC’s open futures contracts was $27.01 billion as of Aug. 8, up from $26.65 billion a day ago. Meanwhile, its funding rate dipped from -0.0441% per week to 0.107% per week over the same period.
The increase in funding rates and OI suggests that traders are once again taking new risks, reflecting a more positive market outlook.
Whale accumulation backs Bitcoin’s upside
Responding to the market’s drawdown over the last few days, Bitcoin whales took advantage of the drop below $50,000 and bought more BTC in the dips, according to market intelligence firm Santiment.
The analytics firm noted that addresses holding between 10 and 1,000 BTC “rapidly accumulated” as BTC dropped to sub-$50,000 levels.
In my opinion, for all that reasons, this is a positive sign as continued accumulation signals bullish sentiment among this cohort of investors. BTC will bullish at the end of this day.
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