NFP: The Catalyst Behind Bitcoin’s Bounce-Or-Break Scenario?
False Breaks and Low Volatility: How Can Bitcoin Regain Its Shine?
It looks like the apex cryptocurrency is at a crossroads, having spent multiple days on the support at $57,000. But this also means that it is getting ready for a strong move to either side. What could be the catalyst for such a move? Most likely the U.S. jobs data that’s about to be released later in the day, mainly the Non-Farm Payrolls report.
A rate cut by the Fed is a certainty at this time but the size of the cut may be in question. Currently, according to the CME FedWatch tool, there’s a 41% chance that the FOMC will decide to cut 50 bps at their September 18 meeting, while the rest of 59% is reserved for a tamer, 25-bps cut. If the NFP comes drastically below expectations, it would suggest the U.S. economy is underperforming, which would strengthen the case for a bigger cut. Numbers above or close to the forecast would show the economy is resilient and can sustain a higher rate for longer.
Considering that the Bitcoin price is directly related to the US Dollar, a stronger greenback would take the pair lower, probably below the $57,000 support and closer to the BRN (big round number) of $55,000. On the other hand, a weaker dollar would allow Bitcoin to climb more easily and without much resistance.
Just recently, on-chain data analytics provider CryptoQuant, indicated that the number of active Bitcoin wallets has dropped to levels last seen three years ago. This lack of interest may be coming from the fact that Bitcoin has been ranging for a few months and no interesting developments took place on the charts. Activity will probably pick up once BTC/USD breaks or bounces from a significant barrier such as $57,000.
Chart Analysis – BTC/USD
Earlier in the week, the bears managed to break $57,000 and reach a low of $55,600. However, what looked like a clean break of support, turned out to be a false move that resulted in a bullish daily candle, closing the day at $57, 956.
Thursday the bears came back in and took the pair below $57,000 again but all this is just seesaw movement, choppy and without a clear direction. As long as the market doesn’t choose a direction, we can expect most of the moves to be reversed.
The RSI is mostly neutral, without showing an extreme condition or any type of divergence. The next move will probably be decided by the NFP result and ultimately by how the market perceives it. For now, patience and caution are recommended.
