In its latest report, Bitfinex revealed that Bitcoin failed to maintain the critical support level of $65,580, leading to a total liquidation of $1.16 billion in the past 24 hours, primarily affecting long positions. Despite a bearish market sentiment and significant declines in both Japanese and US stock markets, Bitfinex anticipates a slight price increase to the $55,000 area. However, the report emphasizes that the overall market trend will heavily depend on broader macroeconomic factors.
Recent economic and political developments have created instability across both cryptocurrency and traditional financial markets. The turmoil in the Japanese stock market, coupled with losses on Wall Street, underscores the interconnectedness of global markets. Bitcoin’s increasing correlation with traditional financial markets suggests that continued declines in the stock market could exert further downward pressure on the cryptocurrency.
US Labor Market Shows Signs of Slowing
The US labor market is showing clear signs of cooling. The unemployment rate has risen to 4.3%, the highest since October 2021, compared to the record low of 3.4% in April 2023. Job growth has slowed significantly, with only 114,000 new positions added this month. The June job openings report indicated a slight decline, with revisions to the previous month suggesting a solid but not alarming deceleration.
In response to these labor market concerns, the Federal Open Market Committee (FOMC) decided on July 31 to maintain the federal funds rate in the range of 5.25% to 5.5%. This decision signals a potential shift toward easing its previously tight monetary policy.
Despite challenges in the labor market, there is a positive note in the economic narrative. Labor productivity surged in the second quarter, reflecting the ongoing strength and resilience of the economy. This productivity boost provides a counterbalance to labor market concerns, suggesting that the economy remains robust despite recent setbacks.
