Summary
- Bitcoin is currently priced at $64,938, reflecting a 1.06% increase today, yet it remains below both its short-term and long-term moving averages.
- The U.S. job market experienced a decline of 23,000 jobs in July, falling short of the anticipated 95,000 increase; consequently, CME FedWatch lowered the probability of a September rate hike to 40% from 55%.
- The near-term outlook appears bearish, but the reduced rate hike expectations may provide some optimism for investors.
The U.S. job market faced a significant setback, with employers reducing their workforce by 23,000 jobs in July, marking the first overall job loss since the recovery from the pandemic. This figure starkly contrasts with economists' prediction of a 95,000 job gain.
The unemployment rate fell to 4.1%, primarily due to a higher number of individuals leaving the labor force altogether. Additionally, the gain for June was revised down from 57,000 to 20,000, and May's figures were nearly halved.
Market reactions indicated that this data might prompt the Federal Reserve to hold off on adjusting interest rates. Treasury yields declined, the dollar weakened by 0.5%, and the CME FedWatch tool showed a drop in the likelihood of a September rate hike to 40%, down from 55% the previous day.
A gentler approach from the Federal Reserve typically supports riskier assets and cryptocurrencies; however, Bitcoin's current chart suggests that the market has not yet regained its upward trend.
Bitcoin Price Analysis
Currently trading at $64,938, Bitcoin has increased by 1.06% (+$683) during the session, closing near its daily high. However, it remains constrained below its two significant moving averages.
The price trajectory illustrates a downward trend: Bitcoin peaked near $80,000 in mid-May, then dropped to a low of around $58,000 in July. The 50-day Exponential Moving Average (EMA) is now below the 200-day EMA, a situation known as a death cross, indicating that the medium-term trend is still downward. Since the low in July, the price movement has flattened out but has not risen above either moving average.
The Relative Strength Index (RSI) stands at 54.6. This momentum indicator operates on a scale of 0 to 100, where values above 70 signal overbought conditions and those below 30 indicate oversold conditions. With an RSI of 54.6, momentum is neutral, providing neither support for a breakout nor a significant decline.
For a bullish scenario to develop, Bitcoin would need to close above the 50-day EMA and the $66,000 resistance level, which could lead to a rally towards the 200-day EMA at $64,000 and the resistance near $72,000. A softer Fed stance and a weaker dollar could provide the necessary impetus for such a movement. However, the bullish case is considered fragile, as Bitcoin has not managed to reclaim the 50-day line throughout this period of consolidation.
The bearish scenario would emerge if Bitcoin falls below $60,000, which would confirm that bearish forces are still in control and could lead back to the July low of $58,000. A daily close below this level would reopen the downtrend that began in the spring.
According to a prediction market on Myriad, developed by Dastan, the outlook for Bitcoin remains pessimistic. Traders are currently assigning a nearly 65% probability that Bitcoin will drop to $55,000 before attempting to recover towards $84,000, with minimal changes observed over the past week.
At this point, $65,000 is a critical threshold. A move above the 50-day EMA could suggest that the July fluctuations are part of a base-building process; however, a fall below $60,000 would indicate a bear flag pattern.
The jobs report provided Bitcoin with a potential macro reason to rally, but the presence of a death cross indicates it has not yet justified such a move.
Disclaimer
The opinions expressed in this article are solely for informational purposes and do not constitute financial, investment, or other forms of advice.