Bitcoin prices rose back above $63,000 earlier today and were once close to $64,000, a gain of about 2.5%.
Bitcoin's rebound began around the time Friday's U.S. monthly jobs report showed nonfarm payrolls rose by 254,000 jobs in September, beating the Dow Jones forecast of 150,000 jobs. "The market's increased optimism for a soft landing shows that the U.S. economy is currently in a 'Goldilocks' state," said Min Jung, an analyst at Presto Research.
Rachel Lucas, a cryptocurrency analyst at BTCMarkets, said the increase in liquidity was driven by improving market sentiment and increased expectations that the U.S. Federal Reserve will cut interest rates again in November. According to the Chicago Mercantile Exchange's (CME) FedWatch tool, there is currently a 97.9% chance that the Fed will cut interest rates again to a range of 4.50% to 4.75%. Lucas said this often promotes more risk appetite among investors, benefiting assets like Bitcoin.
Lucas explained that another factor supporting Bitcoin’s rebound is the decrease in Bitcoin on centralized exchanges, which is typically associated with bullish price action as there is less selling pressure in the market.
"However, to sustain this recovery, Bitcoin needs to break through and hold the key resistance level of $64,500. If achieved, we may see a retest of the $66,000 price level," Lucas said.
However, both Lucas and Presto’s Jung said geopolitical tensions in the Middle East pose significant risks to Bitcoin’s continued near-term rally.
“October has started off slowly — despite being historically a strong month for Bitcoin — but analysts are optimistic that the pace of the rebound will pick up as the month progresses,” Lucas said.
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