Written by Babywhale, Techub News
On Friday night, just as Bitcoin was about to break through the $72,000 mark, the much-better-than-expected U.S. non-farm payrolls data for May caused Bitcoin to fall from around $72,000 to around $70,600 in a few minutes. Although it rebounded slightly afterwards, from 22:00 on Friday night when the Hong Kong incident occurred to 2:00 yesterday, Bitcoin plummeted from the highest point of the rebound of around $71,500 to a low of around $68,400 in the four hours from 22:00 on Friday night to 2:00 yesterday. At the time of writing, it had rebounded to around $69,400.
It can be seen from the TradingView chart that after Bitcoin hit an all-time high of nearly $74,000 in mid-March, it has been fluctuating around the high point at the end of 2021, but it has failed to effectively maintain the $72,000 or even the $70,000 integer mark for five consecutive times. Is there really any hope of reaching the $80,000 or even $100,000 that the market has been looking forward to?
Non-agricultural data exceeded expectations, and risk assets plunged
On Friday night, the U.S. Bureau of Labor Statistics released the U.S. non-farm payrolls data for May. The number of non-farm payrolls in the U.S. increased by 272,000 in May, nearly 50% higher than the 18.5 expected by economists. The unemployment rate rose by 0.1% from the previous month to 4.0%, also higher than the forecast of 3.9%. Although the rising unemployment rate is conducive to the implementation of the Fed's interest rate cut policy, the market is more inclined to believe that the employment situation remains strong because the non-farm data far exceeded expectations.
Influenced by this news, the three major U.S. stock index futures all experienced a short-term plunge. Although they all rebounded and even set new highs afterwards, they almost fell back to the starting point by the close of the U.S. stock market.
As a high-risk asset, Bitcoin seems to be more affected than the stock index. After a short-term sharp drop due to the unexpected non-farm data, Bitcoin's rebound was not as strong as that of the US stock index, and then it plummeted in a short period of time when the US stock market fell.
At 2 a.m. when most people were just falling asleep, Bitcoin fell to a low of around $68,400. In the four-hour continuous decline that began at 22:00 yesterday, the total network contract liquidation exceeded $300 million.
Bitcoin isn’t worth $70,000?
The author has expounded a point of view in past articles that after Bitcoin broke through the high of around US$69,000 at the end of 2021, it did not rise sharply soon, but started to fluctuate near the previous high, which may not be an optimistic signal.
If we observe the price of Bitcoin in the last bull market, we will find that the time Bitcoin was above 60,000 was not long, only about 1 month in total. That is to say, in the last bull market, the highest price the market priced Bitcoin at was only about 60,000 US dollars.
Since the beginning of this year, Bitcoin has been fluctuating around the range of $60,000 to $70,000, but has never been able to effectively break through the integer mark of $70,000, and every time it breaks through the mark for a short period of time, it has fallen rapidly. The question we need to think about at this time is that even with the support of Bitcoin spot ETFs, Bitcoin still has not been able to achieve the "surge" that everyone expected. Does this mean that the market's highest price for Bitcoin is not more than $70,000?
If calculated at $70,000, the total value of Bitcoin exceeds $1.4 trillion, which is second only to Microsoft, Apple, Nvidia and Amazon in the US stock market. Although we believe that Bitcoin has indeed brought revolutionary innovation, is a high-risk asset that relies heavily on liquidity really worth it? Assuming that Bitcoin really rises to $100,000 or even higher, will the market really buy it? This is also a question worth thinking about.
Of course, I am not saying that Bitcoin will never reach new highs. It’s just that its price has shown a downward trend after repeatedly touching around $72,000, where it only needs a little more effort to reach new highs. This requires us to remain vigilant to a certain extent about future market trends and not be “blindly bullish” anymore.
