The cryptocurrency market ended the week flat after the latest jobs report further deflated hopes of an interest rate cut by the Federal Reserve in the first quarter of 2024, leading some to limit their amount of risk until a clearer economic picture emerges. 

Stock traders brushed the report aside, however, as strong earnings reports from tech giants Amazon (AMZN) and Meta (META) on Thursday helped bolster the major indices and diminished Wednesday’s Powell-inspired pullback to nothing but a footnote in an overall positive week. 

At the closing bell, the S&P, Dow, and Nasdaq all finished in the green after reaching new all-time highs on Friday, up 1.07%, 0.35%, and 1.74%, respectively. 

Data provided by TradingView shows that the jobs report led to a spike in volatility for Bitcoin (BTC), with its price whipsawing to a low of $42,530 and then spiking to $43,700, before ultimately returning to support near $43,000. At the time of writing, BTC trades at $43,005, a decrease of 0.14% on the 24-hour chart. 

BTC/USD Chart by TradingView

Analysts at Coinbase see a potential end to the sideways trading for Bitcoin on the horizon as “Many technical factors pressuring Bitcoin specifically (and crypto more broadly) are starting to be exhausted,” they said in a report released Thursday. 

“This is evidenced by the liquidations at FTX (disposing of their Grayscale Bitcoin Trust or GBTC shares, for example) as well as the emergence of some large defunct entities from bankruptcy,” they said. “Indeed, net inflows into US spot bitcoin ETFs have averaged more than US$200M daily over the last week (taking the total net inflows to $1.46B since January 11) with a healthy daily volume of ~$1.35B. Consequently, we expect macro factors to become more relevant for the digital asset class in the weeks ahead, which could be supportive for performance.”

Citing comments from the Federal Reserve that “the risks to achieving [the board’s] employment and inflation goals are moving into better balance,” Coinbase said this “suggests the easing cycle will most likely start on May 1, while an end to the Fed’s balance sheet reduction plans could start in June (though there’s a chance it could begin around the same time as rate cuts).” 

“We do not believe the disinflationary trend will be derailed and expect the Fed to cut rates by 100bps this year, compared to the 75bps implied in the dot plot or the almost 150bps priced into Fed funds futures,” they said. “That would also be consistent with the typically anodyne stances pursued by policymakers during election years.”

“Ultimately, this would coincide with idiosyncratic drivers like the Bitcoin halving in late April and could potentially prop up both Bitcoin and other tokens in 2Q24,” they said. “Moreover, we expect the effects of more advertising from ETF issuers and the inclusion of spot Bitcoin ETFs in asset managers’ model portfolios to unlock increased liquidity in this space.”

MN Trading founder Michaël van de Poppe said he continues to hold the view that Bitcoin will trade sideways until the halving in April – to the benefit of altcoins – before heading higher in the second half of the year. 

My vision of #Bitcoin remains the same. 

I think we’ll consolidate, and in that period, we’ll see altcoins picking up momentum.

At this point, #Chainlink is showing some impressive upward momentum already. pic.twitter.com/5Z5A9EQbtl

— Michaël van de Poppe (@CryptoMichNL) February 2, 2024

Mixed end to the week for the altcoin market

Altcoins finished the week mixed, with a majority of tokens in the top 200 recording gains on Friday. 

Daily cryptocurrency market performance. Source: Coin360

API3 led the field with an increase of 27.8%, while Flare (FLR) climbed 12.7%, and Pendle (PENDLE) gained 12.3%. Sui (SUI) saw the largest decline, falling 5.9%, followed by a 5.6% loss for ApeCoin (APE), and a decrease of 4.9% for Gate Token (GT). 

The overall cryptocurrency market cap now stands at $1.65 trillion, and Bitcoin’s dominance rate is 51.2%.