Summary:
Bitcoin's price struggles above $98,000 amid concerns of overvaluation.
Network Activity Index has dropped 15%, indicating low trader enthusiasm.
Eric Trump's endorsement failed to boost Bitcoin's price significantly.
Gold has surged over 9% this year, reaching a record high of $2,882 per ounce.
The upcoming NFP report is critical for understanding employment trends.
Bitcoin's Struggles Amid Weak On-Chain Activity
Bitcoin (BTC) continues to struggle, failing to capture trader enthusiasm amid concerns about overvaluation. Currently priced just above $98,000, recent analysis from CryptoQuant suggests that Bitcoin's fair value lies between $48,000 and $95,000.
The Network Activity Index for Bitcoin has dropped 15% from its peak in November, hitting the lowest level in over a year at 3,760 points. This decline is exacerbated by a 53% drop in daily transactions, plummeting to 346,000 from a record high of 734,000 in September.
Despite recovering from an early Monday slide, BTC has struggled to maintain momentum above $100,000. The market sentiment is dampened, partly due to the Trump administration's slow progress in establishing a proposed BTC strategic reserve.
Interestingly, Eric Trump has recently encouraged investments in BTC through the family-affiliated World Liberty Financial, but this endorsement has not led to significant upward movement in Bitcoin's price.
Gold's Resurgence
In contrast, gold has surged over 9% year-to-date, reaching a record high of $2,882 per ounce. This week alone, gold has increased by 2.32%, positioning it for its sixth consecutive weekly gain. According to UBS, gold's rise highlights its enduring appeal as a store of value and a hedge against uncertainty, drawing investors away from Bitcoin's tepid performance.
Focus on Nonfarm Payrolls
The upcoming nonfarm payrolls (NFP) report will provide critical insights into the employment landscape for January. Estimates suggest a slowdown in job additions to 170,000, down from 256,000 in December, while the unemployment rate is expected to remain stable at 4.1%. Average hourly earnings are anticipated to rise by 0.3% month-on-month.
A significant miss in expectations could lead traders to reconsider the potential for faster Fed rate cuts, possibly boosting demand for riskier assets like stocks and Bitcoin. Conversely, strong data could complicate matters for the Fed, leading to increased risk aversion.
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