Bitcoin Remains Unmoved by Rise in Jobless Claims, Treasury Rates

Treasury yields hit 10-year highs, sounding a note of potential caution for risk markets, cryptocurrencies, but bitcoin continued to be unstirred by macro events.

AccessTimeIconAug 3, 2023 at 7:36 p.m. UTC
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A mildly encouraging tick higher in initial jobless claims and alarming rise in Treasury yields failed to move bitcoin’s price much, continuing a months-long trend of BTC immunity to macroeconomic events.

Bitcoin remained relatively unmoved following the jobs report, trading 0.47% higher on Binance. The CoinDesk Bitcoin Price Index (XBX), which leverages real time prices across multiple exchanges rose 0.72% by comparison.

To be sure, a number of major altcoins were recently down more than 5% over the past 24 hours amid the soaring yield increases. But bitcoin seemed likely to remain in the narrow range between the $29,000 and $29,500 spread that it’s largely held for the better part of two weeks. Bitcoin was currently trading just above $29,200.

Bitcoin remains in search of a price catalyst that seems increasingly unlikely to come from outside the industry. Spot bitcoin ETF approvals and the 2024 BTC halving can’t come soon enough for bulls.

Initial jobless claims tick higher

The number of Americans filing for unemployment rose to 227,000 last week, 6,000 higher than the prior week, and above expectations of 225,000.The increase signaled at least a slight loosening of labor markets.

Weaker labor markets are historically a prerequisite for lower interest rates, so the reading seems positive on the surface. However, that jobless claims are still near 2023 lows, and 40,000 lower than in June. Thursday’s reading followed an unexpectedly strong ADP jobs report that indicated the hot job market is far from ready to cool. Friday’s full Non-Farm Payrolls report may offer more clarity on the employment market’s direction.

U.S. Treasury Yields Hit 2023 Highs

The yield on 10-year U.S. Treasuries rose to its highest level since November 2022, as bond traders reacted to a Fitch downgrade of U.S. debt, and Thursday’s jobless claims. Market observers are differing on the significance of increased 10-year yields.

One interpretation is that capital is flowing from Treasurys because investors see opportunity for better risk adjusted returns in other markets. As bond prices and yields move in opposite directions, a bond sell-off in search of greener pastures results in higher yields.

This would likely result in improved overall sentiment about the U.S. economy. Risk assets such as equities, commodities and cryptocurrencies would benefit.

The other interpretation however is simply that interest rates will be higher for longer than expected and that attitudes about the economy are unlikely to improve. Investors may expect inflationary metrics to persist pushing yields higher across all bond maturities, weighing on cryptocurrency prices.

The proof is sometimes in the pricing

Cryptocurrency prices continue to stagnate. The capital flowing from bonds into risk assets doesn’t appear to be moving into digital assets. Bitcoin has traded tightly between $29,000 and $30,000 since June 22.

Ether has behaved similarly, ranging between $1,890 and $2,000 over the same period. The assets combined make up 66% of total cryptocurrency market capitalizations.

Bitcoin balances fall

In another sign of reluctant crypto markets, the total balance of bitcoin in “accumulation addresses” has declined, according to analytics firm Glassnode. "Accumulation addresses" have never spent funds and received at least two incoming transfers. A decline in this indicator implies distribution of bitcoin from addresses historically more apt to hold long term.

Bitcoin Accumulation Addresses (Glassnode)

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Edited by James Rubin.


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Glenn Williams

Glenn C Williams Jr, CMT is a Crypto Markets Analyst with an initial background in traditional finance. His experience includes research and analysis of individual cryptocurrencies, defi protocols, and crypto-based funds. He owns BTC, ETH, UNI, DOT, MATIC, and AVAX

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