Bitcoin Braces for NFP: Breaking Out or Staying In?
Will US Jobs Data Heat Up or Chill Out Demand?
Bitcoin added more than 70% to its price since the beginning of 2023, but could this mean that it climbed too much, too fast? On the 1st of January, Bitcoin was changing hands at around $16,600 and the high of the year thus far is $29,380 (reached on March 24). Since printing that high, the apex cryptocurrency remained inside a relatively tight range.
This range could very well be broken today! The Non-Farm Employment report is a catalyst for massive US Dollar moves, which consequently affects Bitcoin and other cryptocurrencies. Also, we shouldn’t overlook the Average Hourly Earnings and Unemployment Rate, both coming out at the same time as the NFP.
The upcoming jobs report, scheduled for release on Friday at 12:30 pm GMT, is a key event that could impact the Federal Reserve’s decision on whether to continue raising interest rates or take a break. This question has been the subject of intense debate in recent weeks, as concerns about the impact of the banking crisis and mixed economic signals have increased the level of uncertainty and unpredictability in the market.
Based on the current consensus among economists, the forecast for job growth in the U.S. in the last month is 228K, a decline from the previous month’s figure of 311K and the impressive result of over 500K jobs added in January. If the actual number of jobs added in March exceeds this estimate, it could signal that the labor market is still strong and resilient, prompting the Fed to increase the rates further. However, if the number falls short of expectations, the opposite effect may occur.
Technical Outlook – BTC/USD
At the time of writing, Bitcoin is trading at $27,970 and has been confined in a range for over two weeks. Considering the importance of the NFP that’s due for release later today, we can expect the range to be broken.
Recent price action has created a symmetrical triangle, which is a somewhat neutral pattern, meaning that the asset can break either to the upside or downside. Since the beginning of 2023, BTC/USD has been trading in an uptrend, but the RSI flashed overbought several times, meaning that a deeper retracement might be in order.
If Bitcoin breaks the upper side of the triangle, we will probably see the bulls challenge the crucial $30K level. On the other hand, a bearish break will likely send the pair closer to the 50-day Moving Average. The previous low ($26,600) is also an important support level.
