Bitcoin busts towards $33K as dollar and government debt rally

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  • U.S. dollar index posts monthly gains of up to 3 percent
  • Bitcoin falls towards $33K support
  • Investors buy government debt
  • 692,000 jobs added in June

NIGERIA (CoinChapter.com) — Bitcoin broke towards $33,000 during the London session Thursday just as the US dollar and government debt rally higher.

The two traditional assets strengthened ahead of Friday’s U.S. jobs data. This data is said to be closely watched by rate-setters at the Federal Reserve.

Also Read: Institutions interest in Bitcoin has fallen drastically, asserts JPMorgan analyst

Bitcoin price has been stagnant for a while in what seems like a tug of war between bears and bulls. Price movements have been sluggish, with no significant moves up or down in any case. But with positive news coming out of the dollar market, and government bonds firming up, investors turned away from riskier assets, hurting Bitcoin in the process.

Number of jobs added exceeds expectations

ADP’s national employment report shows that the U.S. private sector employers had added 692,000 jobs in June. This was ahead of the forecasted number by economists who predicted that jobs added in June would be 600,000.

Although the number of jobs added is down from previous month, it has sparked some positivity in the markets.

Also Read: Tesla rival starts mining cryptocurrencies via a prototype electric car

Bitcoin has responded to this news with a downward trend. More jobs in the market mean a quicker withdrawal of expansionary policies set up by the Federal Reserve in March 2020, including a near-zero interest rate and a $120bn monthly asset purchase program.

The BTC/USD exchange rate rose from $3,858 to $65,000 amid Fed’s loose monetary policies. Meanwhile, it fell from $65,000 to as low as $30,000 later, primarily as the Fed hinted that it would scale back its asset purchasing and hike interest rates to curb inflation spikes.

Fund managers remain wary of making big bets despite these numbers. Investors remain quite averse to buying riskier assets. Instead, choosing to buy government debt, which had rallies due to uncertainty causing investors to go into assets with less risk.

Bitcoin bull rally in the works?

The latest downside move by Bitcoin is a small one. Not big enough to lead to calls for another rally. While every little thing adds up to push the price of Bitcoin higher, other factors keep the coin down. 

Bitcoin price falls towards $33K as dollar and government debt rally. Source: BTCUSD on TradingView.com
Bitcoin price falls towards $33K as dollar and government debt rally. Source: BTCUSD on TradingView.com

Hash rate is currently down due to the China crackdown on mining. Investors are still wary of the market. 

Amidst this, the U.S. dollar index has posted gains upwards of 3 percent. The U.S. dollar index is measured against other currencies which are its peers. 

Also Read: SafeDollar crashes to zero following Polygon exploit

Being down in previous months, the gains in the dollar index has left investors breathing a small sigh of relief as the dollar strengthens.

Bitcoin price remains steady in the market. Traders are currently holding the asset above the $33K price point in the last 24 hours.

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