Bitcoin Inches Above $56K Ahead of Optimistic Jobs Report as Strong Run of Form Continues

By October 8, 2021DeFi
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Bitcoin price is now over $56k and looking bullish ahead of a possible US Federal Reserve plan for more stimulus payments.

Bitcoin is now changing hands above $56K, which represents a five-month high and a strong momentum. This spike is coming ahead of a US jobs report scheduled for release later today. The US non-farm payrolls (NFP) report is expected to reveal the addition of 500,000 jobs in September to the nation’s economy. This is more than double the 235,000 additions for August, and represents a jobless rate dropdown of 0.1%, according to FXStreet. Furthermore, this job report could underscore consensus that the Federal Reserve will roll out crisis-era stimulus beginning in November.

Since the pandemic first hit in early 2020, the BTC price has been largely influenced by critical macro data releases. A typical example of this would be the NFP’s influence on the Fed’s monetary policy. However, things are different this time around due to the current strong run of form for the token’s price. The outcome from the impending data release may not matter much. However, a weak report may very well be positive for asset prices in general.

Another primary reason for the BTC indifference might be the speculation that US regulators would soon greenlight a futures-based Bitcoin ETF, which supports more mainstream funds. Bitcoin is seemingly in a good place, after decoupling from stocks and bounced hard from $40,000. Moreover, all these happened despite unfavorable macro developments on institutional participation.

Reasons Given for Bitcoin Surpassing the $56K Price Level

According to Pankaj Balani, CEO of Delta Exchange, Bitcoin is definitely on a roll, even after China’s recent financial crisis. As Balani put it:

“The cryptocurrency has digested all the negative news that has come out of China in the past few weeks, which is a very positive sign.”

Balani further added that there is a wave of new buying BTC activity. With regards to price action, Balani said “…we expect to see a fresh ATH in the coming weeks.” This is in reference to an all-time high, of which the current record is $64,801, attained in April.

QCP Capital, a Singapore-based firm, stated that there is a staggering amount of outright buying in CME-based futures. The company further gave many reasons for this bullish sentiment. They include Evergrande’s improved situation, impending US Bitcoin ETF approvals, and traditional financial institutions like Soros Fund Management becoming more crypto-friendly. However, for all its optimism, QCP advises caution and foresees a pullback if leverage continues to go up. In its Telegram channel, the firm said:

“BTC OI is reaching levels that tend to precede market sell-offs. We will start to be cautious of potential downside risk if OI levels continue spiking.”

Open interests in futures contracts are over three times as high YoY, rendering the market more vulnerable to leverage washouts.

As of press time, Bitcoin price sits at $55,375.

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