Bitcoin (BTC) saw flash volatility near the Wall Street open on Wednesday as the US jobs report came in much better than expected.
Important points:
Bitcoin is looking to salvage the day’s losses on the back of strong US non-farm employment data.
Mixed signals result in diversified reactions of risk assets to numbers.
Bitcoin traders remain wary of further declines in BTC prices.
Analysis: Fed interest rates paused for “continuation”
According to TradingView data, BTC price soared to nearly $69,000 before quickly falling back, recording daily losses widening by more than 4% at the time of writing.
U.S. non-farm payrolls were significantly higher on the day, with January payrolls increasing by 130,000 compared to the expected 55,000.
Strong labor market numbers tend to suggest there is less need to cut interest rates, which is usually a headwind for cryptocurrencies and risk assets. At the same time, the reduced likelihood of a recession creates a delicate picture for the performance of risk assets.
As a result, the S&P 500 Index initially rose 0.5%, while the Nasdaq Composite Index fell 0.6%, and both have since rebounded.
Precious metals also saw uncertain price action, with gold hitting a new February high before retracing its value to support at $5,000.
Reactions, Trading Resources The Kovesi letter also cited falling unemployment in predicting the Fed would keep interest rates unchanged at its March meeting.
“The unemployment rate fell to 4.3%, lower than the 4.4% expected. This was a much stronger jobs report overall than expected,” the paper said in a post on X.
“The Fed pause will continue.”
According to the latest data from CME Group’s FedWatch tool, there is a more than 90% chance that interest rates will be suspended in March.
All eyes are now on Friday’s Consumer Price Index (CPI) results for further clues about the path of inflation.
Traders note ‘slow bleeding’ in BTC price towards $50,000
Traders remain unimpressed with Bitcoin’s recent price movements, commenting that it is trending towards a new downward trend.
Related: BTC traders wait for $50,000 bottom: 5 things to know about Bitcoin this week
Daan Crypto Trades has set Fibonacci retracement levels at $64,569, $62,474, and $59,805, noting the possibility of a deeper retracement.
“After the initial rally, the results were pretty weak overall. The bulls were unable to push past the $72,000-plus mark and instead the price fell again,” he summarized.
“Unless ~$68,000 is recouped, the focus in the short term is the level of fibritracement.”
Previously, Cointelegraph reported that $69,000 has long-term significance, with the risk of an extended range environment currently increasing around that level.
The $50,000 BTC price floor target is also maintained, with trader Jere claiming that BTC/USD is “very similar” to the 2022 bear market trajectory.
“We’ll see a relatively slow decline from here towards the low $50,000s before rebounding. If the same trend continues,” he told X Followers.
“A lot of people are talking about buying there. I doubt if they would if prices went up that high.”
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