Bitcoin (BTC) continues to trade sideways around the $27,000 mark as new data reveals better-than-expected US job numbers. According to an economic news release by the U.S. Bureau of Labor Statistics (BLS), payroll employment rose by 339,000 in May despite the unemployment rate increasing by 0.3% to 3.7%. “Total nonfarm payroll employment increased by 339,000 […]
The post Bitcoin (BTC) Hovers Below $27,000 as US Jobs Numbers Soar, Beating Many Estimates appeared first on The Daily Hodl.
Eyes are on $28,000 support to hold in the event of continued downside, but Binance order book data warns that even this may be "rugged."
Bitcoin (BTC) recovered from new ten-day lows at the April 20 Wall Street open as United States jobs data boosted investor confidence.
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reversing upward after hitting $28,360 on Bitstamp.
Amid an ongoing correction, the pair nonetheless failed to reclaim even $29,000 as support as U.S. unemployment data hinted that tighter financial conditions were working to cool inflation.
Spot gold became the main risk asset beneficiary, climbing back above $2,000 on the day.
U.S. equities opened higher but subsequently reversed their uptick, with the S&P 500 and Nasdaq Composite Index down 0.6%.
With BTC/USD circling $28,800 at the time of writing, popular Twitter trader and analyst Adam warned over the current range failing to hold.
“This seems like a ‘lose this level, and it's lights out’ type of scenario,” he admitted alongside a chart showing the support range.
“Participation-wise, at lows pretty muted for my liking to get aggressive long here. Happy to buy reclaim above local S/R.”
Fellow trader Pierre meanwhile eyed a retest of a “no-trade zone” extending down to $27,000.
A few days later, and here we are retesting the "DO NOT TRADE HERE" zone from above, in confluence with D1 trend that has been defended since 20.5-21.8k. https://t.co/q2km1uyfgu pic.twitter.com/VwPKC3FKM4
— Pierre (@pierre_crypt0) April 20, 2023
An additional post explained the likely upside and downside targets should BTC/USD fail to preserve a trend in place for multiple weeks on daily timeframes.
price > D1 trend (defended since low 20s) & 28,000-28,500 (May 2022 support // March 2023 resistance) confluence == good
— Pierre (@pierre_crypt0) April 20, 2023
price < D1 trend (defended since low 20s) & 28,000-28,500 (May 2022 support // March 2023 resistance) confluence == bad
Voilà, that's it. GL HF https://t.co/k50u8cwR6a pic.twitter.com/Bjzhq7DgZ9
Data from the Binance order book showed bid liquidity thinning below spot an hour before the jobs data, with the nearest substantial support now at $28,000.
“Note: Local support just got rugged,” monitoring resource Material Indicators, which produced the data and uploaded it to twitter, wrote in part of accompanying commentary.
“Some was placed to absorb a dump just above $28k. If it gets hit, expecting $28k to get rugged.”
With funding rates negative, long liquidations took a breather on the day after April 19 saw the largest tally of 2023.
Related: Can Bitcoin reclaim $30K? Watch these BTC price levels next
According to data from Coinglass, cross-crypto long liquidations on that date totaled $262 million, with the April 20 number at just $34 million.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
BTC traders are cautiously optimistic due to Bitcoin traditional assets, but there are still some macro headwinds to be aware of.
Bitcoin (BTC) price has finally broken the $30,000 level after the key price zone lasted as a ten months resistance level. BTC price rallied 6.5% on April 10 and the much-awaited price gain ended an agonizing 12-day period of extremely low volatility, which saw the price hovering close to $28,200. Bulls are now confident that the bear market has officially ended, especially considering the fact that BTC price has gained 82% year-to-date.
Another interesting note is, Bitcoin's decoupling from traditional markets has been confirmed, after the S&P 500 index presented a mere 0.1% gain on April 10, and WTI oil traded down 1.2%. Bitcoin traders are likely anticipating the Federal Reserve's interest rate policy to reverse sooner than later.
Higher interest rates make fixed-income investments more attractive, while businesses and families face additional costs to refinance their debts. The reversal of the U.S. central bank's recent tightening movement is deemed bullish for risk assets. However, the fear of stagflation — a period of increased inflation and negative economic growth — would be the worst-case scenario for the stock market.
Fixed-income traders are betting that the Federal Reserve probably has one more interest-rate hike because the latest economic data displayed moderate resilience. For instance, the 3.5% U.S. unemployment rate announced on April 7 is the lowest measure in half a century.
The U.S. treasuries market suggests a 76% chance that the Federal Reserve will bolster the benchmark by 0.25% on April 29, according to Bloomberg. There's also the added uncertainty of the banking crisis's impact on the sector, with JPMorgan Chase, Wells Fargo and Citigroup scheduled to report first-quarter results on Friday.
Bitcoin's rally above $30,000 could be the first evidence of a shift in investors' perception from a risk market proxy to a scarce digital asset that might benefit from a period of inflation pressure and weak economic growth.
Two critical factors will determine whether the rally is sustainable: the high leverage usage increasing the odds of forced liquidations during normal price fluctuations, and whether or not pro traders are pricing higher odds of a market downturn using options instruments.
Bitcoin quarterly futures are popular among whales and arbitrage desks. However, these fixed-month contracts typically trade at a slight premium to spot markets, indicating that sellers are asking for more money to delay settlement.
As a result, futures contracts in healthy markets should trade at a 5-to-10% annualized premium — a situation known as contango, which is not unique to crypto markets.
Bitcoin traders have been cautious in the past few weeks, and even with the recent breakout above $30,000, there has been no surge in demand for leverage longs. However, the Bitcoin futures premium has slightly improved from its recent low of 3% on April 8 to its current level of 4.2%. This suggests that buyers are not using excessive leverage and there is effective demand on regular spot markets, which is healthy for the market.
Traders should also analyze options markets to understand whether the recent correction has caused investors to become more optimistic. The 25% delta skew is a telling sign when arbitrage desks and market makers overcharge for upside or downside protection.
In short, if traders anticipate a Bitcoin price drop, the skew metric will rise above 7%, and phases of excitement tend to have a negative 7% skew.
Related: Microstrategy Bitcoin bet turns green as BTC price climbs to 10-month high
Currently, the options delta 25% skew has shifted from a balanced demand between call and put options on April 9 to a modest 4% discount for protective puts on April 10. While this indicates a slight increase in confidence, it is not enough to break the 7% threshold for moderate bullishness.
In essence, Bitcoin options and futures markets suggest that pro traders are slightly more confident, but not excessively optimistic. The initial decoupling from traditional markets is promising because investors are showing confidence that crypto markets will benefit from higher inflationary pressure and it highlights traders’ belief the Fed can no longer continue raising interest rates.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
A widely followed crypto analyst is telling traders that the latest US unemployment data is good news for Bitcoin (BTC). Crypto trader Michaël van de Poppe tells his 652,300 Twitter followers that the music will continue to play for BTC… for now. “Unemployment Data comes in at 3.5%, while 3.7% was expected. Good data for now, other […]
The post Top Analyst Breaks Down Latest Unemployment Data, Says ‘Music Keeps On Playing’ for Bitcoin appeared first on The Daily Hodl.
Economist Nouriel Roubini has shared his opinion about bank problems in the United States in a recently published opinion editorial. In the article, Roubini insists that “most U.S. banks are technically near insolvency, and hundreds are already fully insolvent.” Roubini: ‘Liquidity Support Cannot Prevent This Systemic Doom Loop’ The renowned economist Nouriel Roubini, also known […]
While several market strategists and analysts expect U.S. inflation to drop considerably in 2023 compared with last year, Michael Wilkerson, founder of Stormwall Advisors, thinks the inflation rate could climb as high as 12% by the end of this year. The country’s inflation rate has cooled down over the past seven months, but Wilkerson insists […]
Bitcoin buyers may get a chance to “load up” below $22,000 on the back of employment statistics.
Bitcoin (BTC) fell prior to the Feb. 3 Wall Street open as fresh United States economic data came in “hot hot hot.”
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it erased gains from earlier in the day to center on $23,000 support.
The pair reacted negatively to U.S. unemployment data for January, which beat expectations so considerably that overall jobless figures fell to their lowest since 1969.
Non-farm payrolls (NFP) data likewise outperformed, while average hourly earnings conformed to forecast 0.3% growth.
“HUGE beat in NFP,” popular analytics account Tedtalksmacro responded on Twitter.
Returning to predictions from the day prior, Tedtalksmacro eyed a potential opportunity to increase Bitcoin exposure, given the latest come-down, which it said could take BTC/USD all the way to $20,000.
“An opportunity to reload on this news, potentially,” a further tweet added.
Bitcoin’s cold feet come from the implication that a stronger-than-forecast labor market allows the Federal Reserve to maintain tighter, less liquid monetary conditions for a longer period of time.
“US economy sliding into a recession? Well, think again. At least not in the near term,” economist and analyst Jan Wüstenfeld continued.
As Cointelegraph reported, the Fed raised interest rates by 0.25% this week, in line with almost all expectations, while Chair Jerome Powell caused excitement by using the term “disinflation” in accompanying comments.
Related: Bitcoin bulls must reclaim these 2 levels as ‘death cross’ still looms
BTC/USD thus spiked above $24,000 for the second time in as many days, with market participants still hopeful of a trip to $25,000 before a more significant retracement.
“BTC has had a clean breakout above its macro downtrend line + a backtest,” investment research resource Game of Trades stated.
“The next big resistance to clear is the $25k region.”
Popular trader Crypto Tony nonetheless acknowledged that that target may no longer materialize.
“$25,000 is my main target, but I am seeing now a lot of people asking for this, and is becoming a crowded trade,” he wrote in part of a fresh update on the day.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Bitcoin price could resume its downtrend if the Fed keeps on hiking rates against the prospects of a rising unemployment rate.
Bitcoin (BTC) has rebounded by 20% to almost $22,500 since Sep. 7. But bull trap risks are abound in the long run as Elon Musk and Cathie Wood sound an alarm over a potential deflation crisis.
The Tesla CEO tweeted over the weekend that a major Federal Reserve interest rate hike could increase the possibility of deflation. In other words, Musk suggests that the demand for goods and services will fall in the United States against rising unemployment.
A major Fed rate hike risks deflation
— Elon Musk (@elonmusk) September 9, 2022
Rate hikes have been typically bad for Bitcoin this year. In context, the period of the Fed raising its benchmark rates from near zero in March 2022 to 2.25%-2.50% in August 2022 has coincided with BTC price declining over 50%.
To this point, the labor sector has been very resilient. Nonetheless, the latest Bureau of Labor Statistics report shows that the jobless rate has risen to 3.7% from 3.5% in August. Even Alphabet (Google) warned that they could turn to layoffs soon to stay 20% more efficient.
But Fed Chairman Jerome Powell has asserted that the central bank could hike rates further to bring inflation down to their preferred target of 2%.
As of July, the U.S. consumer price index (CPI) was 8.5% year-over-year. The August inflation data is scheduled to release on Sep. 13, with a Reuters poll of economists predicting it would fall to 8.1%, citing a recent drop in energy prices.
That is still far from the Fed's 2% inflation target, which according to David Blanchflower, a former Bank of England rate setting committee member, will lead to a hard landing. Thus, a hawkish Fed could usher in rising joblessness and an economic recession, similar to what Musk predicts about deflation.
Along the same lines, Ark Invest CEO Cathie Wood, who sees Bitcoin hitting $1 million by 2030, cited the latest Manheim data, noting that the used car prices dropped 4% in August and roughly 50% in 2022. The metric again indicates waning consumer demand.
Deflation in the pipeline, heading for the PPI, CPI, PCE Deflator: from post-COVID price peaks, lumber -60%, copper -35%, oil -35%, iron ore -60%, DRAM -46%, corn -17%, Baltic freight rates -79%, gold -17%, and silver -39%. https://t.co/nVpU1cdf1L
— Cathie Wood (@CathieDWood) September 12, 2022
Bitcoin could feel the pain of a deflation-led recession, with Ecoinometrics' analyst N suggesting that companies with cash holding would not dip their toes in a volatile asset until the economy has bottomed.
He explained:
"From 2020 to 2021, there is a large number of new entrants in the space of digital assets, which pretty much doubled the total hodlings in treasuries. And as the market slowed down, everything stopped."
Retail investors could follow a similar strategy, notes Q.Ai, a Forbes-backed investment service.
In other words, higher borrowing rates would increase the flow of people's monthly incomes toward debt repayment (mortgages, credit cards, etc.), decreasing their cash allocation for riskier assets like Bitcoin.
Macro fundamentals may also trigger Bitcoin's bearish technicals to play out, particularly on the daily chart.
Bitcoin appears to have been forming an inverse-cup-and-handle bearish reversal pattern, confirmed by a flipped U-shaped price trend (cup) followed by a short uptrend (handle), all atop a common support level called the "neckline."
Related: Bitcoin is a ‘wild card’ set to outperform — Bloomberg analyst
As a rule of technical analysis, an inverse cup-and-handle pattern's profit target is measured after subtracting the neckline level price by the maximum cup's height, as shown below.
Therefore, from a technical perspective, BTC's price risks new multi-year lows below $14,000 in 2022, down about 37.5% from today's price.
Moreover, Filbfilb, creator of trading suite DecenTrader who accurately predicted Bitcoin's bottom in 2018, told Cointelegraph that BTC can drop as low as $11,000 later this year, based on the historical volume around this level.
"As it stands, the price of Bitcoin is heavily correlated to the 'legacy' markets, in particular the NASDAQ, which we know is under huge pressure due to the Federal Reserve’s monetary policy," he explained. "So this time 'it’s a bit different' due to the high correlation and external economic forces."
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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A Wells Fargo analyst has predicted the largest “reduction in U.S. bank headcount in history.” Banks are expected to cut 200,000 jobs as they strive to improve productivity and efficiency amid rising competition from fintech and non-bank financial institutions. US Banking Sector to Experience Biggest Headcount Reduction An analyst with Wells Fargo, Mike Mayo, has […]