Bitcoin Price Soars Above $62,000 Again: Top 3 Reasons

The Bitcoin price records a major rally in recent days. After plummeting to a low of $49,000 on Monday, the BTC price soared as high as $62,700 during the Asian trading session today. Thus, BTC has surged 24% from its Monday low. Over the last 24 hours alone, BTC has risen by 7%. These are the key reasons:

The Bitcoin price soared above $62,000 again on Thursday morning as key US economic data came in better than expected. The BTC price surged by 7% in the past 24 hours alone, continuing its recent rally from a low of $49,000 earlier this week.

Here are the three main reasons for the Bitcoin price rally today.

#1 Fading US Recession Fears Fuel Bitcoin Rally

Macro economics are the clear driver of the price move as equities have rallied along with Bitcoin. Notably, the July unemployment rate in the United States increased to 4.3%, the highest in the last four months. This triggered concerns about a potential recession, as per the Sahm Rule.

This economic indicator suggests that a recession might be starting if the three-month moving average of the national unemployment rate rises by 0.50 percentage points or more relative to its lowest point in the previous 12 months.

The initial panic was exacerbated by a jobs report that fell short of expectations, with only 114,000 new jobs compared to the anticipated 175,000. However, the narrative shifted dramatically yesterday with the latest release of jobless claims data. A significant drop to 233,000, down by 17,000, marked the largest decline in almost a year, soothing jittery markets.

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

US weekly jobless claims came in at 233,000, down from a revised 250,000 — a relief after last week’s unemployment and growth scare. The details of this data release will be subject to a higher level of scrutiny with a view to assessing breadth and other distributional aspects.

Macro analyst Alex Krüger further elaborated that “the market crash triggered by last week’s unemployment & payrolls data has now fully reversed, after today’s weekly jobless claims data. Price action and new jobs data confirm what I suspected: that the whole equities market had a crypto style levered flush-out, driven mostly 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 makes emphasis on making no decisions on single data points. Payrolls data can be very noisy. Yet last Friday much of the market went on a crazy rampage calling for a policy mistake and emergency rate cuts.”

#2 Short Liquidations Amplify BTC Surge

The volatility in Bitcoin’s price also catalyzed a significant number of short liquidations. In the past 24 hours alone, 52,413 traders were liquidated, with total crypto liquidations reaching $222.02 million, according to Coinglass data.

For Bitcoin specifically, over $90 million in short positions were liquidated, marking it as the third-highest short-liquidation event in the past five months.

Julio Moreno, Head of Research at CryptoQuant, clarified the impact of these liquidations on the market: “This Bitcoin bounce has been mostly shorts covering positions in the futures market. Open interest down, prices up.”

#3 MicroStrategy Buying?

As the Bitcoin price climbed higher, there was a notable surge in demand from the spot market. Crypto analyst Kiarash Hossainpour speculated, “You heard it here first: I could imagine this crazy late night market buy coming from none other than Saylor. The guy just announced another $2 billion buy the other day. Who else buys in the illiquid hours after the US close on a Thursday night? Exactly, nobody.”

MicroStrategy, under the leadership of Michael Saylor, announced last week plans to increase its Bitcoin holdings significantly, preparing to raise $2 billion through a new at-the-market equity offering as reported in its Q2 2024 earnings report. The company stated: “We continue to closely manage our equity capital, and are filing a registration statement for a new $2 billion at-the-market equity offering program.”

At press time, BTC trades at $61,186.

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