Bitcoin (BTC) continues to dawdle, failing to capture trader enthusiasm amid chatter about prices being overvalued, while gold remains strong ahead of the release of the U.S. jobs report, which will influence the Fed’s rate plans.
Recent analysis from CryptoQuant indicates that bitcoin’s fair value lies between $48,000 and $95,000, highlighting that it appears overvalued at its current market price, which hovers just above $98,000.
The analytics firm’s Bitcoin’s Network Activity Index has plummeted 15% from its peak in November to 3,760 points, the lowest level in over a year. The downturn is driven by a staggering 53% drop in daily transactions, which have fallen to 346,000 from September’s all-time high of 734,000.
Since its recovery from the slide early Monday, BTC has struggled to gain traction above $100,000. Market sentiment has likely been stifled, largely due to the Trump administration’s slow progress in establishing a proposed BTC strategic reserve.
Interestingly, Eric Trump recently encouraged investments in BTC through the family-affiliated World Liberty Financial, yet this endorsement failed to catalyze any significant upward movement.
In contrast, gold is getting all the love, having surged over 9% year-to-date to reach a record high of $2,882 per ounce, per data from TradingView. With a 2.32% increase this week alone, the yellow metal appears on track for its sixth consecutive weekly gain. UBS notes that gold’s rise underscores its “enduring appeal as a store of value and hedge against uncertainty,” drawing investors away from the tepid performance of Bitcoin.
On Friday, the anticipated nonfarm payrolls (NFP) report will shed light on the state of employment for January, with estimates tracked by FXStreet suggesting a slowdown in job additions to 170,000 from December’s 256,000. The unemployment rate is expected to remain stable at 4.1%, with average hourly earnings anticipated to rise by 0.3% month-on-month, matching December’s pace.
A big miss on expectations could see traders reconsider the possibility of faster Fed rate cuts, sending the 10-year Treasury yield lower. That could spur demand for riskier assets like stocks and bitcoin. Moreover, the 10-year yield could see a sharp decline, given that the Trump administration is focused on lowering the same.
On the flip side, strong data, against the backdrop of the tariffs threat, would only complicate matters for the Fed, potentially leading to risk aversion.
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