Key Takeaways
- In September, the U.S. economy added only 29,000 jobs, significantly below the anticipated 84,000, leading to a drop in the likelihood of an October Fed rate hike to around 14% from 70% earlier this week.
- Bitcoin is currently priced at $86,152, sitting about 1.4% lower than its September peak of $87,354.
- Market analysts are examining potential future movements for BTC based on current trends.
Negative economic news is proving beneficial for risk assets once again.
According to the Bureau of Labor Statistics, only 29,000 jobs were added in the U.S. during September, falling short of the expected 84,000. Additionally, the unemployment rate rose to 4.2%, with the previous two months' job figures revised down by a total of 60,000.
Myriad: Predict Bitcoin's next peak.Wall Street interprets this news as a sign that the pressure to raise interest rates has diminished, which typically benefits risk assets like Bitcoin. Following these macroeconomic developments, Bitcoin, the largest cryptocurrency by market capitalization, experienced a notable increase, with analysts suggesting it might continue to rise throughout this month, affectionately referred to as Uptober.
To provide some context, the Federal Reserve raised interest rates by a quarter point on September 16, marking the first increase of 2023 and bringing the target range to 3.75%-4.00%. While higher rates generally mean less accessible capital for investments, Bitcoin has demonstrated resilience compared to traditional markets.
In the wake of this rate hike, Fed officials have indicated a more cautious approach. New York Fed President John Williams mentioned on Tuesday that there was "no need for urgency," while Fed Vice Chair Philip Jefferson noted on Thursday that policymakers might require additional time before contemplating another rate increase.
As a result of the job report, the odds of a rate hike at the upcoming October meeting have plummeted, now standing at 14% compared to 70% earlier in the week. Prediction markets such as Kalshi and Polymarket, alongside Myriad, suggest an 80% probability that rates will remain unchanged on October 28.
Myriad: What will the Fed's next move be?.The crypto market has reacted positively, with the total market capitalization exceeding $3 trillion, reflecting a 2.5% rise in the last 24 hours. Additionally, the Fear & Greed Index is at 71, indicating a strong sentiment of greed among investors. ETF inflows have also been robust, totaling $102 million today, while Bitcoin's market dominance is recorded at 59.1%.
Bitcoin Price Analysis: Approaching Resistance
Currently, Bitcoin is trading at $86,152.75, up 1.57% for the day after opening at $84,824.05. The price has touched a high of $87,173.15 today, nearing the September high of $87,354.33, which serves as a crucial resistance level. The lowest price today was $84,492.18.
Bitcoin price data. Image: TradingviewThis September peak followed a rally from a low of $74,977.57, representing a 16.5% increase. Since then, Bitcoin's price has been fluctuating around this level. Below are insights from technical indicators regarding the likelihood of a breakout.
The Average Directional Index (ADX), which assesses the strength of a trend, is currently at 41.8, indicating a strong upward trend as the buyers (DI+) are positioned above the sellers (DI-). High ADX readings suggest that the trend is well-established.
The Exponential Moving Averages (EMAs) illustrate that the faster 50-day EMA is above the slower 200-day EMA, a bullish sign indicating that short-term momentum is outpacing the longer-term trend. Additionally, the price has remained supported by a green shaded cloud since mid-August.
The Relative Strength Index (RSI), which indicates buying pressure, is at 68.1, suggesting strong momentum but nearing the overbought threshold at 70, where traders often begin to take profits.
The Squeeze Momentum Indicator shows a positive reading of 2.2, indicating that the previous price compression has concluded, resulting in upward volatility. Bitcoin's current price is at 78.4% of the band range, positioned in the upper half.
The technical outlook is decidedly bullish; however, there are caveats. The RSI is close to indicating overbought conditions, and the broader economic context remains challenging, with a potential rate hike in December still being factored in, and yields are high. Traders will be looking for a daily close above $87,354, with ADX maintaining its strength before confirming a breakout, while the Fed's October 28 meeting looms as a significant macroeconomic event.
Disclaimer
The opinions expressed by the author are solely for informational purposes and should not be considered as financial or investment advice.