Bitcoin recovers slightly after falling to a seven-week low overnight driven by a selloff in tech stocks.
Concerns that the Democratic sweep in the U.S. midterm elections this week could lead to a slowdown in artificial intelligence investment dented tech stocks and weighed on risk-sensitive assets, including cryptocurrencies. A rebound in oil prices due to renewed worries over the Middle East conflict also dampened risk appetite.
However, U.S. stock futures Friday pointed to a recovery in the tech-heavy Nasdaq, providing some relief to bitcoin.
Bitcoin rose 0.5% to $76,122 in European morning trade after hitting $75,131 overnight, its lowest level since mid-September, LSEG data showed. Ether, meanwhile, rose 0.4% to $2,235 after reaching a one-week low of $2,206 overnight.
The next key test for bitcoin is the U.S. nonfarm payrolls report, due to be published at 1330 GMT, given its potential impact on expectations for interest-rate rises by the Federal Reserve.
"Stronger employment and wage growth could reinforce expectations of restrictive monetary policy, strengthening the dollar and placing renewed pressure on bitcoin toward $75,000, followed by potential support around $72,000," Zaye Capital Markets chief investment officer Naeem Aslam said in a note.
"Conversely, weaker employment growth, rising unemployment, and moderating wages could encourage expectations of lower future interest rates, potentially supporting a recovery toward $78,000-$80,000, with $82,000 representing a more significant resistance area," he said.
Economists polled by The Wall Street Journal expected the U.S. jobs data to show nonfarm payrolls rising 59,000 in October after a 29,000 increase in September and the unemployment rate remaining at 4.2%.
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