Key Points
- Bitcoin price slips under $97,000 as US jobs data release approaches and gold price continues to rise.
- Blockchain analytics firm CryptoQuant reports a significant drop in Bitcoin Network activity while gold gains momentum.
The price of Bitcoin is experiencing selling pressure, with the value falling below $97,000 as the release of the US jobs data approaches. The enthusiasm of traders appears to be waning due to the ongoing macroeconomic conditions, such as the tightening of US dollar liquidity and the Federal Reserve’s continued elevation of interest rates. Meanwhile, the price of gold is steadily increasing, reaching new highs of $2,840 due to strong global demand.
Decline in Bitcoin Network Activity
According to CryptoQuant, a blockchain analytics firm, the activity on the Bitcoin Network has seen a significant 15% drop. This decrease is from the high of 3,760 points in November 2024 to a one-year low. Furthermore, the daily transactions on the Bitcoin network have decreased by a substantial 53%, from a record high of 734,000 in September to currently at 346,000.
The firm also noted that the fair value for Bitcoin price is between $48,000 and $95,000. This suggests that Bitcoin appears overvalued at the current price of $98,000. Despite recovering from a drop early Monday, Bitcoin has struggled to maintain momentum above the $100,000 mark. Additionally, market sentiment has plummeted as the initial optimism surrounding Donald Trump’s strategic Bitcoin reserve announcement fades.
Moreover, inflows into spot Bitcoin ETFs have recently slowed down due to market uncertainty. On Thursday, the net flows remained negative, with $140 million in total outflows. Fidelity’s FBTC saw over $100 million in outflows, while Grayscale’s GBTC experienced more than $42 million in outflows. This suggests a waning market sentiment.
Rise in Gold Price
Gold, on the other hand, has been garnering considerable attention recently. It has soared more than 9% year-to-date to hit a record high of $2,882 per ounce, according to TradingView data. Over the past week, it has gained 2.32%, and it is on track for the sixth consecutive week of inflows.
UBS points out that gold’s upward trend reflects its “lasting appeal as a store of value and hedge against uncertainty.” This appeal is attracting investors away from Bitcoin’s lackluster performance. Analyst Mary noted that market sentiment today is being influenced by economic data, with gold (XAUUSD) holding steady within the 2844-2858 zone. The precious metal continues to consolidate above its previous resistance level, with buyers maintaining control and keeping the bullish trend intact.
Impact of US Jobs Data
The highly anticipated nonfarm payrolls (NFP) report, set for release on Friday, will provide insights into the state of the job market for January. Estimates from FXStreet suggest a slowdown in job additions to 170,000, down from December’s 256,000. The unemployment rate is likely to remain unchanged at 4.1%, while average hourly earnings are expected to rise by 0.3% month-on-month, in line with December’s growth.
