Bitcoin Hits $62K as Cryptos Bounce; Correction Likely Over But Expect a ‘Slow Grind Higher,’ Arthur Hayes Says

Bitcoin experienced a nearly 5% increase, reaching over $62,000 during US daytime due to a weaker-than-anticipated U.S. April jobs report. This news alleviated worries about rising interest rates. At present, bitcoin is trading at around $61,600, representing a 4.4% growth and surpassing the 3% gain of the CoinDesk 20 Index (CD20) during the previous 24 hours.

Ether regained the $3,000 mark, recording a 3% increase, whereas Dogecoin, Shiba Inu, and Near Protocol’s NEAR tokens experienced growth between 5% and 10%.

The Nonfarm Payrolls report revealed that the U.S. economy expanded by adding 175,000 jobs in April, which was below analyst predictions of 245,000 new jobs and a significant decrease from the previous month’s figure of 315,000. Additionally, the unemployment rate rose slightly to 3.9% from March’s rate of 3.8%.

According to the latest report, there’s been an increase in the predicted probability for the Federal Reserve to make at least one interest rate reduction by September. The likelihood, as shown by CME FedWatch data, has risen from 57% to 68%.

The price adjustment of Bitcoin starting from mid-March has aligned with increasing apprehensions among Federal Reserve officials regarding a more aggressive monetary policy due to persistent inflation during the past few months. Some investors have even ruled out any prospect of rate reductions this year. This shift in Fed stance has significantly boosted the U.S. dollar index, which has reached its highest point since November. Historically, a stronger U.S. dollar can be unfavorable for crypto investments.

Coinbase analysts David Han and David Duong also considered this week’s Federal Open Market Committee (FOMC) meeting where policymakers showed no intention of reducing interest rates but decided to slow down the pace of the central bank’s balance sheet reduction, which is also known as quantitative tightening. This move was seen as a sign of dovishness by the analysts.

According to Han and Duong’s perspective, the Federal Open Market Committee (FOMC) making a more dovish-than-anticipated declaration implies that the US Dollar’s (USD) upward trend against foreign currencies (FX) and cryptocurrency pairs has reached its zenith.

“Based on my analysis, I believe we may have seen bitcoin’s local low around $56,000 this week. However, investors should brace for a prolonged period of slow price growth rather than a sudden surge back up to previous highs.”

Looking ahead, he predicted that the price would surge past $60,000 before stabilizing in a range of around $60,000 to $70,000 until August.