Key takeaways:

• Soft data from the US labor market triggered a rotation of capital from overheated AI stocks into Bitcoin and gold.
• Bitcoin onchain indicators point to seller exhaustion as oil price decline opens room for monetary expansion.

Bitcoin regained the $61,000 level after a disappointing US jobs report. Traders became less confident about a short-term interest rate escalate by the US Federal Reserve (Fed) due to deteriorating labor market data. The oversold tech-based Nasdaq index has raised hopes for capital rotation in Bitcoin’s favor.

Nasdaq 100 futures (blue) vs. Bitcoin/USD (orange). Source: TradingView

The Nasdaq 100 index erased gains from the previous three days, while bitcoin distanced itself from Wednesday’s low of $57,750. According to Yahoo Finance, the number of non-farm workers in the US increased by only 57,000 in June, i.e. it did not reach the expected 113,000. The US Department of Labor also revised down the data for April and May by 74,000. jobs.

Gold prices reacted positively on Thursday, pointing to a potential uptrend for rare assets. According to CME, tender economic data led investors to reduce the chances of a Federal Reserve rate hike by September to 54% from 64% a day earlier FedWatch Tool. Meanwhile, WTI oil prices have stabilized below $70, opening the door to possible economic stimulus measures

Gold/USD (red) vs. WTI crude oil (turquoise). Source: TradingView

Oil prices fell after Qatar’s Foreign Ministry on Wednesday cited “positive progress” in the latest round of talks between U.S. and Iranian officials. Gold has recovered some of the 8% losses accumulated over the previous two weeks, which may mean that investors expect monetary policy to ease and the Fed’s balance sheet to expand further.

Total U.S. Federal Reserve assets, millions of dollars. Source: FED St. Louis

The Federal Reserve’s balance sheet has remained at $6.73 trillion, although its mandate allows for $40 billion in monthly purchases of short-term Treasuries and bonds. Weak labor market data and reduced inflationary pressures are widely seen as catalysts for the crisis accelerated liquidity injectioncreating incentives to invest in rare assets, including gold and Bitcoin.

Overheated AI stocks collide with Bitcoin flashing at the bottom

Weakness in the artificial intelligence sector, particularly among chipmakers, has led traders to predict a shift of capital toward alternative assets. Shares of SanDisk, Seagate, Western Digital and Applied Materials all posted intraday losses of 9% or more on Thursday. In contrast, Bitcoin is showing signs of seller exhaustion two months after rejecting the $82,500 price.

Related: Bitcoin exceeds 60 thousand dollars amid Fed inflation talks – will a bull trap or 65,000 be next? dollars?

Source: X/gaah_im

Onchain analyst and author of CryptoQuant gaah_im said Bitcoin’s realized profit-to-loss ratio has hit its lowest level since 2022. The percentage of net supply in profit relative to total supply has turned negative, which has historically marked cycle bottoms with “extraordinary precision,” according to the analyst. Fundamentally, onchain data points to Bitcoin continuing to outperform.

Part of Bitcoin’s recent weakness stems from trader disillusionment with the strategy. Despite solid net leverage of 8% and an enterprise value of $56.8 billion, shareholders faced dilution from MSTR’s accelerated issuance of shares used to redeem part of the debt and cover dividends on preferred stock.

If weakness in the AI ​​sector gains momentum, some of this money will likely turn into gold and Bitcoin, allowing for a short-term rebound to $70,000.