Bitcoin price has seen a significant boost in recent days. After falling to a low of $49,000 on Monday, BTC price rose to $62,700 during today’s Asian session. With this, BTC is up 24% since its low on Monday. In the past 24 hours alone, BTC is up 7%. Here are the main reasons:

#1 Declining US Recession Fears Drive Bitcoin Rise

Macroeconomics is a clear driver of price action, as stocks have risen alongside Bitcoin. Notably, the July unemployment rate in the United States rose to 4.3%, the highest level in four months. This has raised fears of a potential recession, according to Sahm’s rule. This economic indicator suggests that a recession could begin if the three-month moving average of the national unemployment rate rises by 0.50 percentage points or more from its lowest point in the previous 12 months.

The initial panic was exacerbated by a jobs report that fell low of expectations, with just 114,000 modern jobs added compared to an expected 175,000. But the narrative changed dramatically yesterday with the latest release of jobless claims data. The keen drop to 233,000, down 17,000, marked the biggest drop in almost a year, calming nervous markets.

Mohamed A. El-Erian, president of Queens College Cambridge and chief economic adviser at Allianz, explained via X that global financial markets reacted to the data release and interpreted it as “relief from last week’s unemployment and growth scares.” However, he also cautioned that “this high-frequency data series is inherently noisy.”

Weekly jobless claims in the U.S. were 233,000, down from a revised 250,000, a relief from last week’s concerns about unemployment and economic growth.
The details of this data release will be subject to more detailed analysis to assess its reach and other distributional aspects. https://t.co/fBqaJVs3sM

— Mohamed A. El-Erian (@elerianm) August 8, 2024

Macro analyst Alex Krüger next developed that “the market crash triggered by last week’s unemployment and wage data has completely reversed itself after today’s weekly jobless claims data. Price action and jobless claims data confirm my suspicions: that the entire stock market had a leveraged, crypto-style outflow, driven primarily by positioning, narrative, and mass hysteria, and not as much by fundamentals.”

Krüger also cautioned against overemphasis on single data points: “There’s a reason the Fed is emphasizing not making decisions based on single data points. The payroll data can be very unclear. But last Friday, a significant portion of the market went into a frenzy, calling for a policy error and emergency rate cuts.”

#2 Short Liquidations Boost BTC Rally

Bitcoin’s price volatility has also caused a significant number of low liquidations. In the past 24 hours alone, 52,413 traders were liquidated, with the total number of cryptocurrency liquidations reaching $222.02 million, according to Coinglass dataIn the case of Bitcoin, more than $90 million of low positions were liquidated, making it the third-largest low liquidation event in the past five months.

Julio Moreno, Head of Research at CryptoQuant, explained the impact of these liquidations on the market: “This rally in Bitcoin is mostly shorts taking positions in the futures market. Open interest down, prices up.”

#3 Buying MicroStrategy?

As Bitcoin’s price has risen, there has been a noticeable boost in demand in the spot market. Cryptocurrency analyst Kiarash Hossainpour It was speculated“You heard it here first: I imagine this crazy late-night buying spree is coming from none other than Saylor. The guy just announced another $2 billion buy a few days ago. Who else is buying in the illiquid hours after the U.S. close on Thursday night? Exactly, no one.”

MicroStrategy led by Michael Saylor announced last week, it plans to significantly boost its Bitcoin holdings as it prepares to raise $2 billion through a modern equity offering, as reported in its Q2 2024 earnings report. The company said, “We continue to closely manage our equity capital and are filing a registration statement for a new $2 billion equity offering program.”

At the time of going to press, the BTC price was $61,186.

Featured image created with DALL.E, chart from TradingView.com