BTC Gains With Tech Stocks On Fed Rate Cut Hopes
Bitcoin is climbing. The digital asset class moved in tandem with U.S. technology stocks on Tuesday, as weaker-than-expected labor market data increased investor speculation that the Federal Reserve may be forced to cut interest rates later this year.
The price of bitcoin (BTC) jumped 2.5% over 24 hours. It reached $70,700, showing a strong correlation with the tech-heavy Nasdaq 100 index, which itself posted a 0.35% gain. This synchronized movement underscores a key market dynamic: risk assets are responding positively to signs of a cooling economy.
At the center of the optimism was the U.S. Job Openings and Labor Turnover Survey, or JOLTS report. The report, a key indicator for the Federal Reserve, showed job openings fell to 8.059 million in April. This is the lowest reading for that metric since February 2021.
Investors interpreted the data as a signal of a softening labor market. A less tight labor market could alleviate wage pressures, a component of inflation the Federal Reserve watches closely. The probability of a Fed rate cut in September, according to the CME FedWatch Tool, has now increased to 62% from below 50% just one week ago.
“Bitcoin continues to be closely correlated with the Nasdaq, which explains the parallel sideways movement over the past two and a half months,” Alex Kuptsikevich, a senior market analyst at FxPro, stated in an email. “Quick dip buying on the downside and profit-taking on the upside have kept the price in a range.”
The broader digital asset market reflected this positive sentiment. The CoinDesk 20 Index, a measure of the largest digital assets, was up 1.2% for the period. Ether (ETH) gained 1.1%, while Solana’s SOL and Dogecoin (DOGE) saw more substantial increases of 3.8% and 3.5%, respectively.
Regulatory Tailwinds and Institutional Flows
Beyond the immediate macroeconomic data, structural developments within the asset class are providing support. The recent approval of spot ether ETFs by the Securities and Exchange Commission (SEC) has buoyed market participants. This regulatory green light is seen as a significant step toward mainstream adoption.
Matt Hougan, CIO of Bitwise, suggested that major wirehouses could begin offering these crypto products to their clients in the third or fourth quarter of this year. Hougan anticipates a potential “wall of money” entering the crypto space, though he cautioned it would likely be a gradual process. The initial flows into bitcoin ETFs earlier this year were strong but didn’t immediately involve these large-scale financial advisory firms.
This pattern, however, isn’t without precedent. Hougan draws a parallel to the launch of the first gold ETFs two decades ago, which also experienced a relatively slow start before accumulating substantial assets over several years. Market analysts suggest a similar trajectory could unfold for both bitcoin and ether investment vehicles.
Corporate adoption provides another layer of support. Semler Scientific (SMLR), a medical technology firm, announced it had adopted bitcoin as its primary treasury reserve asset. The company’s disclosure confirmed it had purchased 581 BTC. The news sent SMLR shares surging nearly 30% in Tuesday trading, demonstrating strong investor approval of the strategy.
From a technical standpoint, Kuptsikevich noted that bitcoin’s ability to recover from dips near the $67,000 level is a constructive sign. He identified the previous peak of $73,800 as the next major resistance level for the asset. A break above that point, market analysts suggest, could open the door to price discovery and new all-time highs.
DISCLAIMER: This analysis is for informational purposes only and does not constitute financial advice. James Sterling and this publication do not endorse any specific investment strategy. The cryptocurrency market is characterized by high volatility, and investors should be aware of the significant risks involved. All investment decisions should be made with the help of a qualified financial professional and after conducting thorough personal research. Past performance is not indicative of future results.
