Bitcoin Attempts to Break Range While Testing Highs of the Week

Bitcoin briefly approached the highest levels of the week before pulling back as investors continue to debate the implications of rising borrowing rates for riskier assets.

The largest token by market value was little changed after earlier rising as much as 1.8% to $20,438. Ether and Polkadot both pulled back after each rose more than 3%. Other cryptocurrencies were mixed, with an index of 100 of the largest digital tokens added about 1%.

Bitcoin’s been glued to a tight trading range of around $19,500 to $20,700 over the past week, with the coin unable to break out above $20,000 in any meaningful way.

“The coin is stuck in a range and momentum is weak,” said Wilfred Daye, chief executive officer of Securitize Capital, a digital asset management firm. Summer seasonality doesn’t help, he added, meaning that there’s low liquidity in the marketplace.

Investors are still grappling with how aggressive the Federal Reserve will continue to be as data shows the US economy continues to be on strong footing while inflation remains high. The US labor market stayed robust in August as employers added jobs and more people entered the workforce, data out Friday showed.

“Into the long US weekend, the market could see some profit taking of short positions today. Hence, a squeeze higher across the crypto space. ” said Teong Hng, chief executive at crypto investment firm Satori Research. “Today’s NFP number does not change the current macro picture.”

Bitcoin has largely been trading in tandem with US stocks, which also rose on Friday. Despite the slight bump higher, the largest cryptocurrency remains down more than 50% this year.

“Bitcoin’s response is more or less fully in tune with how risk assets elsewhere reacted to today’s NFP numbers.” said Vetle Lunde, analyst at Arcane Crypto. “It’s promising that BTC holds for now, but investors should pay close attention to the potential implications of the $19k area breaking. Nevertheless, by now, a vast majority of traders seems to focusing on protection and hedging.”