Tech stocks drive the rebound, Bitcoin hovers around 70,000, and the market remains in defensive mode.

Tech stocks rebound on Monday, continuing last Friday’s rally and driving the overall market higher. The total cryptocurrency market cap slightly decreased to $2.39 trillion, with the Fear & Greed Index remaining in the extreme fear zone at 9. Bitcoin (BTC) consolidates modestly between 68K and 71K, while Ethereum (ETH) gradually rises from $2,000 to around $2,100. A predominantly pessimistic market sentiment usually indicates a period of consolidation rather than a quick rebound.

Tech stocks rebound on Monday, focus shifts to economic data

Concerns over AI trading have eased. Over the past two weeks, such worries peaked, severely impacting software companies and casting a shadow over tech firms with rising capital expenditures. Meanwhile, traders are closely watching key economic data that could influence the Federal Reserve’s interest rate expectations.

Alphabet (Google’s parent company) plans to raise $20 billion through issuing U.S. dollar bonds, far exceeding the expected $15 billion. Additionally, the company is conducting its first-ever bond issuance in Switzerland and the UK. The UK issuance will include rare century bonds.

The employment report due Wednesday is expected to show an increase of 69,000 non-farm jobs in January. The unemployment rate is expected to remain at 4.4%. The data will also include revised figures, likely showing a significant downward adjustment of non-farm employment over the next year through March 2025.

Economists will look for more evidence in the upcoming Consumer Price Index (CPI) release to determine if inflation is trending downward. Before that, retail sales data will be released on Tuesday.

These releases could influence market expectations for the Fed’s next interest rate move. Traders generally expect policymakers to keep rates unchanged at next month’s meeting.

Bitcoin hovers around $70K, market remains in extreme fear

The overall crypto market cap slightly declined to $2.39 trillion, with the Fear & Greed Index still in the extreme fear zone at 9. Recent sharp fluctuations in the crypto market have shaken investor confidence.

Bitcoin consolidates modestly between 68K and 71K, while Ethereum gradually rises from $2,000 to around $2,100. On February 6, U.S. Bitcoin spot ETF saw $371 million in inflows, but Ethereum spot ETF experienced a small outflow of $16.75 million.

Bitcoin’s implied volatility has dropped significantly from 90% last Thursday to 54% currently, indicating a reduced market expectation of large price swings in the near term. However, many indicators remain defensive. The funding rate for Bitcoin perpetual contracts remains below zero, and the skewness of options pricing, dominated by fear or greed, still heavily favors put options, suggesting ongoing demand for downside protection. A predominantly pessimistic market sentiment usually indicates a period of consolidation rather than a quick rebound.

This article, “Tech stocks drive rebound, Bitcoin hovers around 70K, market remains in defensive mode,” originally appeared on Chain News ABMedia.