US new unemployment claims at 3-year low... Bitcoin correction amid strong government bonds and dollar

Source: BlockMedia Original Title: [New York Coin Market/Close] Bitcoin falls below $93,000… Rate cut expectations retreat amid strong jobs data, XRP down 4% Original Link:

Market reverses after jobs data release… Bitcoin pauses

On the 4th(local time), the digital asset(virtual asset) market failed to maintain the upward trend that continued until the previous evening and turned downward during New York hours. Bitcoin showed strength, rising to as high as $93,800 during the session, but then selling pressure emerged, pushing it down to the low $92,000 range. The decline was attributed to strong US jobs data, which weakened expectations for interest rate cuts and weighed on risk assets overall.

The US Department of Labor reported that initial jobless claims last week totaled 191,000, the lowest since September 2022, indicating the job market remains overheating. As the Federal Reserve(Fed) is seen prioritizing inflation and employment stability over concerns about economic slowdown, early rate cut expectations have receded. On the day, the dollar index rebounded to 99.009, and the US 10-year Treasury yield rose to 4.112%. Changes in the macro environment exerted adjustment pressure on risk assets across the board, including digital assets.

Bitcoin and Ethereum weak… XRP plunges 4%, Tron rises alone

On CoinMarketCap, Bitcoin traded at $92,131, down 1.01% over 24 hours, while Ethereum was down 0.29% at $3,126. XRP(XRP) plunged 4.02% to $2.09, and major tokens including Solana(-1.08%), Binance Coin(-0.87%), and Dogecoin(-1.70%) all showed broad weakness. In contrast, Tron rose 1.52%, continuing its upward trend as the only major gainer.

Correlation with tech stocks collapses… pattern similar to past lows

The market is paying attention to Bitcoin’s weakening correlation with traditional financial markets. According to CoinDesk, the 20-day correlation coefficient between Bitcoin and the Nasdaq 100 index dropped to -0.43, indicating the relationship has reversed. This rare pattern has occurred only four times in the past five years, and in all previous cases, it coincided with Bitcoin’s short-term bottom.

James van Straten, AI Boost analyst, noted, “In the past, when Bitcoin’s correlation with traditional assets collapsed, it often marked the turning point for a rebound,” adding, “This situation also suggests the possibility of a bottom forming.”

ETF inflows and deleveraging… Leaving room for year-end rally

Recent structural changes in the Bitcoin market are also drawing attention. Historically, if November ended weak, December tended to decline as well; but this year, the structure has changed due to deleveraging and spot ETF inflows. The market sees Bitcoin’s recovery of the monthly volume-weighted average price(rVWAP) and open interest dropping from $94 billion to around $60 billion as laying the groundwork for a renewed rally without the risk of overheating.

The possibility of short squeeze in the market is also noteworthy. If $96,000 is breached, approximately $3 billion in short positions could be forcibly liquidated, and if it exceeds $100,000, more than $7 billion in shorts could be liquidated. This means that any subsequent rally could be accompanied by a sharp price surge.

“Focus on structural changes over traditional cycles”

There is growing support for the view that Bitcoin’s current trend is being reshaped by global liquidity and spot ETF demand changes, rather than the traditional 4-year cycle. Crypto analyst Michaël van de Poppe said, “This cycle is similar to the liquidity expansion phases of mid-2016 or late 2019, and we’re closer to the early stage of recovery than to a price peak,” adding, “It’s more important to focus on structural factors than on time-based cycles.” Jay Yoon, CEO of Alpha Asset Management, also emphasized, “With the possibility of a structural rebound open until year-end, a flexible strategy that takes short-term volatility into account is needed.”