Despite a partial recovery on Thursday, Bitcoin‘s price faced downward pressure on Friday, dropping 0.69% over the past 24 hours to $67,587.1 by 13:54 ET (18:54 GMT). The cryptocurrency had previously fallen to as low as $64,000 earlier in the week amidst waning risk appetite across broader markets.
Various factors contributed to the stalled rebound, including an earthquake in Taiwan, escalating geopolitical tensions in the Middle East, and persistent uncertainty surrounding U.S. interest rates. Traders remained inclined towards the dollar and other safe-haven assets due to these uncertainties, with the dollar seeing a rise in value while gold prices remained close to record highs reached earlier in the week.
Adding to the market’s unease were a series of hawkish comments from Federal Reserve officials, indicating that concerns over persistent inflation could deter the Fed from early interest rate cuts.
Bitcoin’s weekly performance reflected the prevailing market sentiment, with the cryptocurrency down approximately 3% over the past five days, poised for a weekly loss. Despite reaching record highs of over $73,000 in March, Bitcoin has struggled to maintain momentum, particularly amidst weakness in the U.S. stock market and other risk-driven assets at the beginning of the second quarter.
Additionally, capital flows into recently approved Bitcoin exchange-traded funds (ETFs) have slowed in recent weeks, alongside a decline in trading activity within the space. While the approval of ETFs had previously fueled Bitcoin’s gains, this trend now appears to be losing steam.
Market attention was particularly drawn to the release of nonfarm payrolls data, which surpassed economists’ expectations. The U.S. employment sector demonstrated robustness with the addition of 303,000 jobs in the last month, exceeding projections of 200,000. Furthermore, the unemployment rate for March fell to 3.8%, below the anticipated 3.9% and a decline from February’s rate of 3.9%.
Nonfarm payroll figures are closely monitored by markets for their potential impact on U.S. interest rate expectations. The prospect of sustained higher interest rates poses challenges for Bitcoin, which typically thrives in low-rate, high-liquidity environments.
In addition to Bitcoin, other cryptocurrencies experienced mixed performance. Ethereum declined by 2.6%, underperforming its peers, amid anticipation of the Securities and Exchange Commission’s decision on spot ETFs for the world’s second-largest cryptocurrency. The SEC‘s ongoing scrutiny into whether Ethereum should be classified as a security further contributed to investor caution.
Meanwhile, XRP rebounded slightly from a one-month low, dropping 0.7% amidst a bleak outlook as the SEC’s case against Ripple progresses.
Despite record highs in crypto derivatives trading volume, the market share of derivatives continued to decline for the sixth consecutive month, falling to 67.8%, the lowest since December 2022. This trend coincided with a significant surge in spot trading volume, indicating a growing preference among traders for immediate cryptocurrency exchanges. Together, spot and derivatives trading reached a record $9.12 trillion in March, underscoring the increasing dynamism within the cryptocurrency market.
