Crypto Markets Rally as Derivatives Traders Bet Big on US Jobs Report
Crypto markets are rallying, with Bitcoin (BTC), Ethereum (ETH), and XRP (XRP) rising by over 2% on Friday. This uptrend is largely driven by derivatives traders taking bullish positions ahead of the U.S. jobs report.
The rise in open interest, which tracks the total value of outstanding futures and perpetual contracts, has contributed to the rally. Bitcoin's open interest has surged to around 653,000 BTC, worth $56.2 billion, up from 626,000 BTC on September 30, a gain of about 4.3%.
The perpetual funding rate has also increased, jumping from around 3% to 10% over the same period. This means traders holding long positions are now paying significantly more to stay long, which raises concerns about the cost and risk of holding these positions.
Crypto-linked stocks, such as Strategy (NASDAQ:MSTR) and Strive (NASDAQ:ASST), have also moved higher, with Coinbase (NASDAQ:COIN) and Robinhood (NASDAQ:HOOD) rising by around 2% in premarket trading.
Analyst Ali Martinez has posted potential cycle targets for each asset, citing resistance levels on their monthly charts. If these targets are met, Bitcoin could reach $190,000, Ethereum could hit $8,800, and XRP could reach $31.87. However, these targets are contingent on confirmed breakouts, not guaranteed outcomes.
The decline in rate-hike odds, with the probability of a Fed rate hike cooling to 24.9% from 37.6%, has also contributed to the rally. The 10-year Treasury yield has pulled back to 5.25%, giving risk assets more room to run.