Crypto bulls gain ground as US rate-hike fears fade

The crypto market is ending the week in a stronger position than where it started, with bitcoin trading at $61,600 after rising 6.5% from Tuesday's nearly two-year low of $57,750. Ether also advanced for a third straight day, adding 11.5% since Tuesday and 2.6% on Friday alone. Other altcoins, including ADA and ZEC, joined the rally. The recovery comes amid a broader market shift, with bitcoin dominance easing slightly as altcoins catch up, though BTC still commands over 50% of the total crypto market cap. On-chain data shows whale accumulation at these levels, with addresses holding 1,000+ BTC adding to positions, while exchange reserves continue to draw down, suggesting reduced selling pressure. The halving cycle, now 10 months past the April 2024 event, has historically seen price appreciation in the following year as miner rewards are cut, tightening supply. Miner break-even economics are currently favorable with bitcoin above the estimated all-in cost of $45,000-$50,000, allowing miners to hold rather than sell.

The catalyst for the turnaround was weak U.S. jobs data released Thursday, which lowered expectations for a Federal Reserve interest-rate increase. A less hawkish Fed outlook typically supports risk assets like cryptocurrencies, as lower rates reduce the opportunity cost of holding non-yielding assets. The improving macro backdrop has also boosted sentiment across the board, with live crypto prices and charts on NowPrice showing the market's positive reaction. The correlation with traditional markets remains notable: the DXY (U.S. dollar index) slipped on the jobs data, providing tailwinds for bitcoin, while falling U.S. Treasury yields reduced the attractiveness of bonds relative to crypto. ETF flow dynamics have also turned positive, with spot bitcoin ETFs seeing net inflows this week after several days of outflows, indicating renewed institutional interest. The broader altcoin rally, led by ADA and ZEC, suggests risk-on appetite is broadening beyond just bitcoin.

Looking ahead, traders will watch for any shifts in Fed rhetoric and upcoming economic data that could alter the rate path. Bitcoin's ability to hold above $60,000 will be a key near-term test. If the bullish momentum continues, the next resistance levels around $63,000 and $65,000 could come into focus, while a break below $57,750 would signal renewed weakness. On-chain metrics such as the MVRV ratio and SOPR will be monitored for signs of overvaluation or profit-taking. The upcoming Consumer Price Index (CPI) release and Fed meeting minutes will be critical in determining whether the current rally has legs or if headwinds from inflation and monetary policy resurface. A sustained move above $65,000 could open the door to retesting all-time highs, but a failure to hold $60,000 might trigger a retest of the $55,000 support zone, where miner capitulation and whale accumulation could provide a floor.