Gold and Bitcoin (BTC) Part Ways Officially
In the financial world, several significant events have unfolded over the past week, with the labor market, cryptocurrencies, and the Federal Reserve taking center stage.
Private payrolls saw a rise of 54,000 in August, falling short of the anticipated 75,000, indicating a potential slowdown in job creation. This development has prompted traders to build on bets that the Federal Reserve might cut interest rates at its meeting scheduled for September 16-17. Labor market concerns are offering further evidence of this economic trend.
Jobless claims increased to 237,000, higher than estimates, suggesting a possible increase in unemployment. This news, coupled with the private payrolls data, has heightened expectations for a Federal Reserve rate cut, with the odds now reaching 97.4%.
Meanwhile, in the cryptocurrency sphere, Bitcoin has shown some interesting movements. After a low of $107,250 on September 1, the digital currency staged a rebound. However, it is currently trading down 0.7% in the last 24 hours, at $110,578. Notably, Bitcoin's correlation with gold, which had been positive for over six months, has turned negative for the first time in recent months. This decoupling was observed by Maartunn, a community analyst at CryptoQuant, and Bloomberg Intelligence senior commodity strategist Mike McGlone.
McGlone noted that this divergence could be short-term as Bitcoin’s rapid price rise might have overheated the market, while gold appreciated steadily. He suggested that the long-term correlation may still hold but has changed recently. Gold, on the other hand, is trading slightly above $3,500, near record highs.
Bitcoin's price is currently trading between $107,000 and $113,000 as of September's start. The digital currency reached a high of $112,600 on Wednesday before retreating.
Investors are focusing on the upcoming big jobs report, which could provide more insights into the state of the economy. As we approach the Federal Reserve meeting, the world watches with bated breath to see how these economic trends will unfold.
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