Bitcoin’s recent flash crash, which wiped out $15 billion in open BTC futures contracts, has raised concerns about the cryptocurrency’s short-term prospects. However, the resilience of Bitcoin after this major liquidity event suggests that long-term demand remains strong despite short-term risk aversion. In this article, we will explore the factors that could delay a retest of $125,000 and the current state of the Bitcoin market.
US Jobs Data and US-China Relations Impact Bitcoin Price
Recent US jobs data has shown signs of weakness, with employers adding only 17,000 jobs in September, compared to 22,000 in August. This has made investors more risk-averse, leading to a surge in demand for US bonds and a subsequent increase in yields. The ongoing trade war between the US and China has also contributed to the uncertainty, with the temporary truce limiting US import tariffs set to expire on November 10. US President Donald Trump has called for an extension, but no concrete developments have been announced.
BTC Derivatives Liquidity Gaps and Regulatory Security Risk
Despite the prospects of improving US-China relations, traders remain cautious about Bitcoin derivatives. Some markets still offer arbitrage opportunities, such as differences between perpetual contracts and spot prices on the same exchange. The limited activity of market makers indicates increased counterparty risk. The Bitcoin perpetual futures funding rate on Binance remains negative, meaning short positions are paying for leverage.
Joe McCann, founder and CEO of Asymmetric Financial, notes that traders will likely wait longer before re-entering the cryptocurrency market. Centralized exchanges have also faced criticism for their handling of liquidation triggers and derivatives pricing. Crypto.com CEO Kris Marszalek has called on regulators to conduct a thorough review of the fairness of practices, citing downtime that only affected certain users and the lack of compliance measures in internal trading.
Conclusion
Bitcoin’s unique properties, allowing it to potentially benefit from rising demand for independent, scarce assets, were not affected by Friday’s flash crash. However, traders’ short-term risk appetite has weakened significantly, which could delay the journey to a new all-time high by several weeks or months. As the cryptocurrency market continues to evolve, it is essential to stay informed about the latest developments and trends. For more information, visit https://cointelegraph.com/news/3-reasons-why-a-bitcoin-rally-to-dollar125k-could-be-delayed.
