After a strong start to the week that allowed it to return above the $20,000 threshold, Bitcoin weakened again this Friday, returning below this critical threshold before the publication of a major American statistic that could have a decisive impact on BTC’s course.
Recall that BTC strengthened at the beginning of the week, thanks to speculation that the US Federal Reserve may delay tightening its monetary policy.
In fact, the JOLTS US jobs opening report on Tuesday added to other previously disappointing indicators, leading investors to believe that the Fed may be losing its grip on the economy, thus adopting a strategy that is not so aggressive.
This helped cryptocurrencies, including Bitcoin, and risky assets in general to rebound. However, those speculations then lost credibility in light of other indicators that were more reassuring on Wednesday, and especially in light of hawkish declarations from members of the Fed on Thursday evening.
The fate of Bitcoin depends on this Friday’s NFP report
Now, traders are eagerly awaiting the publication of the NFP report on US job creation in September this evening at 2:30 pm This is indeed the most important statistic regarding the US labor market.
However, the Fed is closely monitoring labor market trends to assess the impact of its monetary policy on the economy. Indeed, the Fed has the dual responsibility of curbing inflation and guiding the US economy toward full employment.
Therefore, a disappointing NFP report this evening would increase the likelihood that the Fed will delay interest rate hikes, or even decide to pause. In this case, the most likely scenario is an increase in the cryptocurrency market in general, and the purchase of Bitcoin is then recommended.
If, on the other hand, the NFP report is better than expected, with job creation above expectations, for example, the Fed should conclude that it has a free hand to continue its aggressive rate hikes. Against this background, sellers would undoubtedly accept Bitcoin.
To correctly anticipate the reaction of BTC/USD and cryptocurrencies in general to this capital release, it is important to know that the consensus of economists is predicting the creation of 250,000 jobs for an unemployment rate of 3.7%. Job creation lower than these forecasts and/or a higher unemployment rate would be considered bad news for the US economy, but good news for cryptos.
Crypto-assets are a risky investment.
BTC/USD at Technical Crossroads
From a technical point of view, it will be recalled that Bitcoin sent a very important bullish signal earlier this week. In fact, the cryptocurrency has battled a long-term downtrend that stretched from its all-time high in November 2021.
However, Bitcoin’s inability to sustainably sustain above $20,000, no doubt due to a desire for investor caution ahead of the NFP report, calls into question the relevance of this signal. This should therefore cause crypto traders to be cautious.
Regarding the chart thresholds to watch in the event of a strong bearish Bitcoin reaction against the NFP report, it should be noted that the short-term charts may see immediate support around $19,800. Then, the psychological thresholds of $19,000 and $18,000 would come into play, before the annual low around $17,500.
If, on the contrary, the impact of the NFP report on Bitcoin is bullish, the $20,500 area will be the first resistance to be considered. Then, the psychological threshold of $21,000 and the 100-day moving average towards $21,127 will be the next zone that BTC/USD could try to reach in case of a rally.
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