Reclaims $60K Mark as Risk Sentiment Improves

Bitcoin experienced a notable increase in price on Friday, reflecting a surge in risk-driven markets. Positive U.S. labor market data alleviated some recession concerns, leading to a broader rally in altcoin prices as well.

Bitcoin rose over 4% to reach approximately $60,588, although it did pull back slightly after peaking at around $61,712. This latest movement means the cryptocurrency is poised for modest weekly gains following a sharp decline of more than 10% the previous week. Earlier in the week, Bitcoin had fallen to about $49,000 amid a market downturn but has since recovered much of its losses.

The uptick in Bitcoin’s price correlates with a broader market rally, particularly in equities, spurred by better-than-expected weekly economic data. This sparked optimism that a slowdown in the U.S. economy might not be as imminent as previously thought. Concerns about a potential recession had heavily impacted risk-sensitive assets recently, particularly following data suggesting a notable recessionary trend.

Additionally, comments from Bank of Japan officials improved market sentiment after the central bank raised interest rates and indicated more hikes might be forthcoming. Officials stated that the Bank would refrain from raising rates during times of market volatility, which supported a recovery in risk appetite. The Japanese yen’s losses also signaled a strengthening of this sentiment.

Bitcoin’s recent rebound has renewed optimism among bullish investors, prompting some to revisit their year-end price target of $100,000 for the cryptocurrency. The dramatic rise in the past 24 hours marked one of the largest daily percentage increases in recent months, leading to substantial liquidations in short positions amounting to nearly $100 million—making it one of the largest impacts on bearish bets this year.

Market analysts believe these gains are fueled by positive sentiment in the stock market and anticipation that Bitcoin could mirror its historical market cycles. One investment firm noted that as the Bank of Japan has indicated it will halt future interest rate hikes, they anticipate that the price will remain above $50,000, barring any temporary dips. They expect the cryptocurrency’s bull market to follow its traditional four-year cycle, with strong price action anticipated in October and November. They also speculated that a victory for Donald Trump could potentially bring in a wave of new buyers, pushing prices above $100,000, despite usual pullbacks that can occur in the months following the halving.

In the wider cryptocurrency landscape, XRP saw a 5% drop after a significant rally, as its issuer, Ripple Labs, faced a $125 million fine from the Securities and Exchange Commission in a protracted legal battle. While this fine was less than the $2 billion initially sought by the SEC, it comes with an injunction requiring Ripple to register any future sales of securities. The ruling did not settle the ongoing debate regarding the classification of crypto tokens as securities, and an appeal of an earlier, more favorable decision for Ripple is expected.

Apart from XRP, other altcoins experienced a surge alongside Bitcoin. The second-largest cryptocurrency increased by 5.5% to around $2,627.93, while other altcoins also showed positive momentum, with slight variations in their price movements.