The price of Bitcoin (BTC) regained $62,000 on May 3, an increase of over 5% on the day. This recovery comes as US employment data has fuelled hopes of forthcoming monetary easing by the Federal Reserve.
After dropping below $54,000 in early July, Bitcoin seems to have overcome its most difficult period. Analysts now expect the cryptocurrency to continue its recovery in the coming weeks.
Bullish momentum supported by macroeconomic data
The rise in the Bitcoin price was fuelled by the release of US employment figures, which came in well below expectations. This weakness in the labor market reinforces expectations of monetary easing by the Federal Reserve.
Indeed, the Fed indicated that it was "prepared to maintain the federal funds rate as long as necessary" and "to respond to an unexpected deterioration in the labor market". This prospect of lower interest rates immediately benefited risk assets like Bitcoin.
Massive liquidations amplified the decline
Bitcoin's fall below $54,000 in early July was accompanied by significant liquidations of leveraged long positions. In all, over $175 million worth of positions were liquidated in 24 hours, exacerbating the fall in prices.
However, these liquidations now seem to have been absorbed by the market. Analysts believe that the worst is behind us and that Bitcoin should be able to stabilize above $60,000 in the coming weeks.
The accumulation of whales, long-term support
Despite the recent volatility, Bitcoin "whales" have continued to accumulate bitcoins during the downturn. According to on-chain data, addresses holding large amounts of BTC have purchased almost 47,000 bitcoins in the last 24 hours.
This massive accumulation of major investors should support Bitcoin's price in the long term. Analysts see it as a sign that we are entering a "new era" for the flagship cryptocurrency.
