The first cryptocurrency rose in price by 10% in a day and overcame the $40,000 mark, again. Investors’ appetite for risk is resuming after several weeks of depression on the financial markets.
The largest cryptocurrency by market value jumped 9.4% to $40,426. Bitcoin has not traded above $40,000 for two weeks. The coin managed to overcome the key resistance of the bears after several weeks of depression. Bitcoin’s growth was helped by the return of investors’ faith in the technology sector, although one of its players, Facebook, showed a more than 20% drop in a single day after financial disclosure. In addition, market participants are encouraged by data on the growth in the number of jobs to 467,000 and decrease in the number of unemployment applications, up to 238,000. Economists polled by The Wall Street Journal had forecast 150,000 new jobs in January.
“The fact that AMZN’s earnings went the way of AAPL, MSFT and GOOGL — and not the way of FB — has given investors more confidence to reengage with the risk-on trade,” said Matt Maley, chief market strategist at Miller Tabak + Co.
Stephane Ouellette, chief executive and co-founder of institutional crypto-platform FRNT Financial, said Bitcoin seems to be consolidating in a similar way to equities around the 200-day moving average. Over the last two days, Bitcoin correlated to Facebook declines, and on Friday to Amazon gains.
“In spite of today’s move from a technical perspective I don’t think we can start saying anything definitive until at least a definitive breakout beyond $40,000 to $41,000.”