BTC Starts 2023 at a Snail’s Pace. NFP Eyed for Breakouts
Crypto Winter Takes Its Toll: Behemoth Genesis Slashes Its Workforce.
Since the FTX debacle back in November 2022, Bitcoin and a large part of the crypto market have been floating sideways like a ship without a helm in a windless sea. After printing a double bottom around $15,600, the apex cryptocurrency made a futile attempt to break the $18,250 resistance before returning close to $17,000 where it is still trading today.
The S/R level at $17,000 has been acting like a magnet and has been the most important level since the FTX-triggered drop. The price is literally hugging it and is trading right on it, apart from a few ‘lovers’ quarrels’ when BTC tries to part ways with $17K but then quickly returns to it.
Thus far, 2023 has been very slow for Bitcoin and volatility is at an all-time low. All this, combined with the prolonged crypto winter, seems to affect not only retailers but also giants like the Genesis crypto lending firm. Recently, the company has laid off 30% of its employees, after initially slashing 20% of its workforce back in August 2022. According to the Wall Street Journal, Genesis is also considering filing for bankruptcy.
A Genesis spokesperson confirmed the news by saying: “As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally”. Suffering from disappearing investor appetite, digital currency-focused bank Silvergate Capital Corp also decided to reduce its number of employees by 40%.
To make some serious, long-term bullish advances, the crypto market needs a notable catalyst. A white swan event to counter the FTX black swan. For the short term, however, today’s NFP release could be enough to provide some wind in Bitcoin’s sails. Scheduled at 1:30 pm GMT, the Non-Farm Payrolls report is the most important job data in the U.S. and is usually accompanied by strong market reactions. Employment is intertwined with inflation, which is a burning issue across the globe at the moment, thus the NFP release could affect the Fed’s next interest rate move.
Technical Outlook – BTC/USD
At the time of writing, the pair is trading at $16,780, touching the 50-day MA, which is flat. All daily candles in 2023 have been very small thus far and the Bollinger Bands are tightly squeezed together.
This is typical behavior for a ranging market and makes it very difficult to anticipate the next move. After moving sideways in a tight range, assets usually break out with a lot of force but the clues regarding the direction of the said breakout are almost non-existent.
The catalyst for today’s movement will be the NFP release and its effects will probably trickle into the next week as well. Caution is recommended until a clearer direction emerges.
