The initial panic was exacerbated by a jobs report that fell short of expectations, with only 114,000 new jobs compared to the anticipated 175,000. However, the narrative shifted dramatically yesterday with the latest release of jobless claims data. A significant drop to 233,000, down by 17,000, marked the largest decline in almost a year, soothing jittery markets.<\/p>\n
Mohamed A. El-Erian, President of Queens College Cambridge and chief economic adviser at Allianz, explained via X that the global financial markets reacted to the data release and interpreted it as \u201ca relief after last week’s unemployment and growth scare.\u201d However, he also warned that \u201cthat this high-frequency data series is inherently noisy.\u201d<\/p>\n
\nUS weekly jobless claims came in at 233,000, down from a revised 250,000 — a relief after last week’s unemployment and growth scare.
\nThe details of this data release will be subject to a higher level of scrutiny with a view to assessing breadth and other distributional aspects.\u2026 https:\/\/t.co\/fBqaJVs3sM<\/a><\/p>\n\u2014 Mohamed A. El-Erian (@elerianm) August 8, 2024<\/a><\/p><\/blockquote>\n
Macro analyst Alex Kr\u00fcger further elaborated<\/a> that \u201cthe market crash triggered by last week’s unemployment & payrolls data has now fully reversed, after today’s weekly jobless claims data. Price action and new jobs data confirm what I suspected: that the whole equities market had a crypto style levered flush-out, driven mostly by positioning, narrative and mass hysteria, and not as much by fundamentals.\u201d<\/p>\n
Related Reading: MicroStrategy\u2019s Michael Saylor Reveals Bitcoin Holdings Top $1 Billion<\/a><\/div>\nKr\u00fcger also cautioned against overemphasis on single data points: \u201cThere’s a reason the Fed makes emphasis on making no decisions on single data points. Payrolls data can be very noisy. Yet last Friday much of the market went on a crazy rampage calling for a policy mistake and emergency rate cuts.\u201d<\/p>\n
#2 Short Liquidations Amplify BTC Surge<\/h2>\n
The volatility in Bitcoin\u2019s price also catalyzed a significant number of short liquidations. In the past 24 hours alone, 52,413 traders were liquidated, with total crypto liquidations reaching $222.02 million, according to Coinglass data<\/a>. For Bitcoin specifically, over $90 million in short positions were liquidated, marking it as the third-highest short-liquidation event in the past five months.<\/p>\n
Julio Moreno, Head of Research at CryptoQuant, clarified<\/a> the impact of these liquidations on the market: \u201cThis Bitcoin bounce has been mostly shorts covering positions in the futures market. Open interest down, prices up.\u201d<\/p>\n
Bitcoin open interest | Source: X @jjcmoreno<\/figcaption><\/figure>\n #3 MicroStrategy Buying?<\/h3>\n
As the Bitcoin price climbed higher, there was a notable surge in demand from the spot market. Crypto analyst Kiarash Hossainpour speculated<\/a>, \u201cYou heard it here first: I could imagine this crazy late night market buy coming from none other than Saylor<\/a>. The guy just announced another $2 billion buy the other day. Who else buys in the illiquid hours after the US close on a Thursday night? Exactly, nobody.\u201d<\/p>\n
MicroStrategy, under the leadership of Michael Saylor, announced<\/a> last week plans to increase its Bitcoin holdings significantly, preparing to raise $2 billion through a new at-the-market equity offering as reported in its Q2 2024 earnings report. The company stated: \u201cWe continue to closely manage our equity capital, and are filing a registration statement for a new $2 billion at-the-market equity offering program.\u201d<\/p>\n
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