Bitcoin Sees Short-Term Revival, Reclaims $17K
The Markets Are Getting Ready for NFP. Volatility on the Rise.
Macroeconomic conditions continue to improve and the Fed is getting ready to slow the pace of the interest rate hikes, allowing risk assets to take a breath of fresh air. In a recent appearance, Fed Chair Jerome Powell hinted that the Federal Reserve will likely loosen its tight monetary policy in the near future. The Chairman confirmed what the FOMC Minutes revealed a week earlier.
According to recent data such as the CPI and PCE Price Index, inflation in the U.S. is starting to subside but it’s too early to call a victory. The rate hikes will continue but at a slower pace, which will translate to a revitalization of the crypto market. The US Dollar is retreating, allowing its counterparts to surge and this behavior will likely transfer to crypto assets as well.
A very important release, which will affect both Forex and crypto markets, is scheduled for today: the Non-Farm Payrolls. It’s the most important jobs data for the U.S. economy and it has stayed constantly on the Fed’s radar.
A hot labor market leads to wage growth, which in turn leads to inflation. As things start to cool off, this will signal the Fed that their measures are starting to pay off and that it may be time to loosen the monetary policy to avoid a recession. The time of the release is 1:30 pm GMT and the expected change in the number of employed people is 200K, lower than the previous 261K.
Technical Outlook – BTC/USD
Bitcoin has just managed to close a daily candle above the resistance at $17,000 but it is currently trading just below it, at $16,975. The pair has seen short-term bullish momentum but since the demise of the FTX exchange, which has sent shockwaves across the market, the bears have been in control.
Looking at the Daily chart, we can see that BTC/USD made a double bottom at $15,632, which is a bullish pattern that suggests that the downtrend is likely to reverse. At the same time, the RSI made a higher low, which is a type of bullish divergence – yet another sign that the bears are running out of steam.
Despite these bullish signs, we should not overlook the fact that Bitcoin is in a long-term downtrend, a ‘Crypto Winter’ if you will. This increases the probability of another drop and a break of the double bottom. If the bulls manage to move the price above the 50-day Moving Average, the balance will tilt in their favor, and in that regard, today’s NFP release will play an important role.
