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Bitcoin remains at $23,000 as gains weigh on assets

The largest cryptocurrency rose as much as 4.2% to $23,467 on Friday, before paring back the gain. Bitcoin remains within the range of around $19,000 to $25,000 that it has held since mid-June. Ether rose as much as 8.4% to $1,724 before also pulling back a bit from the day’s highs.

“That was not a good employment report for risk assets,” Craig Erlam, a markets analyst at Oanda, said in an email. “That could worsen any downturn in the future, which is why we are seeing risk assets sink and Bitcoin is among them. It’s still a bit higher on the day, but has given back a good chunk of its previous gains.” Other coins remained higher, with Polkadot and Aave gaining more than 5%.

Cryptocurrencies have been trading alongside risk assets for months, seeing high correlations with the Nasdaq 100 in particular. They have struggled as expectations for Federal Reserve rate hikes mounted amid stubbornly high inflation, but have broken past their worst levels in recent months.

Nonfarm payrolls rose 528,000 last month, beating all estimates and the biggest gain in five months, data from the Labor Department showed on Friday. Employment in the previous month was revised up to a gain of 398,000. The unemployment rate fell to 3.5%, matching a five-decade low. Wage growth accelerated and the labor force participation rate declined.

“The Fed is likely to be less concerned about recessionary conditions and more focused on its dual mandate of inflation and unemployment,” said Josh Olszewicz, head of research at digital asset fund manager Valkyrie Investments. Central bankers are likely to continue rate hikes, reducing the appeal of alternative assets.

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