Stock and crypto markets rose before falling on Thursday.
The latest U.S. jobs data showed a continued cooling in the labor market, with continuing unemployment claims at their highest level since November 2021. Financial markets started the day on a positive note, but sentiment began to weaken during the midday session.
Bitcoin data showed that after trading sideways around $65,000 early Thursday morning, Bitcoin fell to the $63,500 support level in the afternoon. As of press time , Bitcoin was trading at $63,717, down about 1% in the 24 hours.
Altcoin fell overall, with 90% of the top 200 tokens by market cap losing money. Among the rising coins, Galxe led the gains with 43.2%, followed by Argon (ANT) with a 17% increase, and Mantle (MNT) with an 8.5% increase. Worldcoin (WLD) fell the most, down 13.4%, Mog Coin (MOG) fell 11.8%, and Brett (BRETT) fell 9.5%.
The current overall market value of cryptocurrencies is $2.33 trillion, and Bitcoin’s market share is 53.8%.
As for US stocks, at the close, the S&P, Dow Jones and Nasdaq indices all fell, down 0.78%, 1.29% and 0.70% respectively. The US dollar index rose 0.50% on the day, and the US 10-year Treasury yield rose 4.1 basis points to 4.2%.
Analysts at Secure Digital Markets believe: “The pullback was accompanied by a decline in open interest and trading volume, indicating that the previous rebound momentum is weakening. The pause in the rebound coincided with a sharp sell-off in the stock market, especially yesterday's 2.7% drop in the Nasdaq index. If this market adjustment continues, it may further hinder the rebound of cryptocurrencies. A close below the 50-day moving average (around $64,000) may indicate a further decline to $62,000.”
Bitcoin establishes support near $64,000
After reaching $66,000 on July 17, BTC price fell back below $65,000 and spent most of July 18 retesting that level before falling.
Market analyst Aksel Kibar said in the X post that $65,000 is a "strong resistance level" and the fact that the BTC/USD pair has not "pullback" significantly is "very bullish for the long term." He said: "Holding resistance levels and no selling intentions is usually a sign of an impending breakout."
IntoTheBlock ’s data chart supports Bitcoin’s upward trend, with its IOMAP model showing that Bitcoin price has received relatively strong support on the downside compared to the resistance it faces on the road to rebound.
For example, the immediate support provided by the 100-day and 200-day EMAs is around $62,700, close to the area where 1.7 million addresses previously purchased around 840,920 BTC. Increased demand in this area could push prices higher.
Long-term bullish thesis remains
Most cryptocurrency analysts agree that BTC’s medium- to long-term outlook remains bullish.
Michaël van de Poppe, founder of MN Trading, said that the Bitcoin network hash rate, which just experienced its biggest drop since the FTX crash in 2022, is evidence that the market is near a bottom.
Poppe said in a follow-up article: “Bitcoin is steadily consolidating over a four-month period. As long as it stays above $60,000, it is likely to continue to rise. Gold prices are hitting all-time highs and yields are falling. It is only a matter of time before Bitcoin rises.”
To further strengthen his argument, Poppe highlighted Bitcoin’s Network Value to Transactions (NVT) ratio, which he called “an important metric for Bitcoin.”
He noted: “This is the most negative value in the past 2.5 years, worse than the crash during Luna, the correction last summer, or the correction after Bitcoin went public. The correction is over, buckle up.”
Aurelie Barthere, chief research analyst at Nansen.ai, analyzed the factors that are favorable for BTC's rebound from a macro perspective.
Barthere said in a report: "The weakening trend in the US labor market we have witnessed so far in 2024 has continued. Fed Chairman Powell said at the Economic Club this week that the Fed is now more concerned about the risk of unemployment rising too quickly, which means that the Fed can achieve the 2-3 rate cuts expected by the OIS market before the end of the year. For cryptocurrencies, low interest rates can play a supportive role as long as US economic growth slows but the economy does not fall into recession."
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