Bitcoin Falls on Stronger Dollar, Shows Signs of ‘Maturing as Digital Collateral’

Bitcoin Falls on Stronger Dollar, Shows Signs of ‘Maturing as Digital Collateral’

Source: AdobeStock / Alex

 

Bitcoin (BTC) kept falling on Friday as the US dollar jumped higher following strong economic data that showed the number of jobs created in the US rose much more than expected.

As of Friday at 17:15 UTC, BTC stood at USD 40,879, down almost 4% for the day but up 7% for the past 7 days. At the same time, ethereum (ETH) traded at USD 2,690, down 5% for the day and up almost 4% for the week.

As often happens on days when the US dollar is strong, however, bitcoin struggled.

“Bitcoin sold off to retest the 20-day moving average at around USD 41,000 this morning, after the impressive 32% rally over the past week,” said Marcus Sotiriou, an analyst at the digital asset broker GlobalBlock.

He added that BTC “failed to secure a higher-high on the daily time frame,” closing below the key USD 46,000 level. 

“Bitcoin is not bullish on the daily time frame until this level is reclaimed,” Sotiriou said.

However, Bloomberg Intelligence’s Senior Commodity Strategist Mike McGlone said that bitcoin is showing signs of strength as it outperforms the Nasdaq stock index, and that it is “maturing toward global digital collateral.”

In the world of traditional finance, the US S&P 500 index traded down by 0.93% for the day at the same time. Meanwhile, Brent oil continued higher for the week, seeing its strongest weekly gains since mid-2020. The oil price reached a high just shy of USD 120 earlier in the week, and traded at USD 114.50 as of press time.

Gold also continued higher, rising 1.27% for the day to a price of USD 1,961.

In Russia, the stock market remained closed for its fifth consecutive day on Friday, while the Russian ruble recorded a weekly fall against the US dollar of more than 30%. The drop sent the ruble to an all-time low of USD 0.00799 at press time on Friday, after heavy sanctions imposed on Russia due to its invasion of Ukraine continued to weigh on the market.

The fall for the Russian ruble was accompanied by a strong gain for the US dollar after a jobs report in the US showed a surprisingly strong labor market.

According to data from the US Bureau of Labor Statistics, the number of new jobs created in February came in at 678,000. The number is well ahead of the roughly 400,000 jobs that analysts had predicted, per Reuters.

The strong numbers came after US Federal Reserve (Fed) chairman Jerome Powell described the labor market as “extremely tight” in his testimony before Congress earlier in the week. During the hearing, he also reiterated that the Fed plans to move ahead with a 25 basis point rate hike in March, despite the war in Ukraine.

The US Dollar Index, which measures the dollar against a basket of other major fiat currencies, was up by 0.95% for the day at press time, reaching its highest level since May 2020.

“Strong upside beat for February job creation (678,000) which, together with favorable revisions, confirm the strength of the labor market,” Mohamed A. El-Erian, a well-known economist and President of Queens’ College, Cambridge University, wrote on Twitter in response to the jobs report.
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Learn more: 
– Bitcoin vs Gold Debate Continues as Both Assets Rise Following Ukraine War
– Bitcoin Pushes Higher Again with Ukraine War Turning into ‘Great Test Case’ for BTC

– Crypto Trading Volumes in Ukraine, Russia Fall After the Early War Spike 
– Bitcoin, the Ukraine Crisis and the Central Bankers Dilemma

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