Bitcoin Confined to Familiar Range as Stocks Rise Before Payroll Data

Bitcoin continues to trade within a familiar range as traditional markets exhibit improved risk appetite, with investors eyeing the release of the monthly U.S. jobs report.

The major cryptocurrency was trading near $ 57,000 at the time of publication, extending a three-day consolidation in the $ 55,800 to $ 59,300 range.

European stocks traded higher, following an overnight rebound on Wall Street, which saw the S&P 500 index jump 1.4%. However, the gains have been moderate at best, with concerns over COVID dominating sentiment. Australia reported the first case of the Omicron variant early on Friday despite travel restrictions being put in place. The United States also recorded the first case earlier this week.

Data on non-farm wages in the United States, due for release on Friday at 1:30 p.m. UTC, is expected to show the world’s largest economy added 550,000 jobs in November after 531,000 additions in October. The unemployment rate is expected to fall to 4.5% from 4.6%, while the average hourly wage is expected to rise 0.4% month-on-month, according to FX Street.

The dollar could resume its recent uptrend, putting downward pressure on bitcoin and asset prices, in general, if the payroll data bolsters bets of a faster normalization of monetary policy by the Reserve federal (Fed).

“Another increase of more than 500,000 digits, a drop in the unemployment rate and an increase in hourly earnings should all support US rates in the near term, as the Fed may exit its very accommodative policy more quickly.” ING analysts noted in a blog post.

“Any steeper-than-expected drop in the unemployment rate (3.8% was suggested as a measure of full employment and the start of the squeeze) or a larger increase in the average hourly wage (for example, more than 0.4% in monthly) could push the dollar higher today, ”added ING analysts.

Thanks to higher than expected inflation, fears of a faster Fed rate hike have gripped markets in recent weeks. On Tuesday, Fed Chairman Jerome Powell withdrew the transitional word from inflation talks and said the central bank may consider accelerating the unwinding of asset purchases in December. Cleveland Fed Chairman Loretta Mester told the Financial Times on Thursday that the Omicron variant could fuel soaring inflation in the United States by putting more pressure on supply chains and exacerbating shortages of workers.

Bitcoin Daily Chart (TradingView)

Bitcoin’s bull run has run out of steam in recent weeks, allowing for a drop of more than 15% from all-time highs.

The cryptocurrency is now looking to break out of a bearish channel represented by trendlines connecting the November 10-15 highs and November 6-19 lows.

A lower-than-expected payroll figure would raise questions about the Fed’s ability to shrink faster, possibly pushing bitcoin, stocks and other risky assets higher. “Bitcoin’s correlation with the S&P 500 has increased amid the general market sell-off, reinforcing our assumption that more sophisticated investors currently do not view bitcoin as a safe-haven asset, but as a risky asset,” Weekly Note from Arcane Research published Tuesday. noted.

Stuck in the support zone

According to Glassnode, the cryptocurrency is currently trading in the $ 55,000- $ 60,000 support area and may face resistance above $ 60,000.

The bitcoin market is currently in one of the largest realized value clusters. Over 2.208 million BTC last spent between $ 55,000 and $ 60,000, ”Glassnode tweeted. “The next large cluster between $ 60,000 and $ 63,000 may act as resistance, while support can be found at $ 50,000 and again at $ 42,000.”

Bitcoin sits on one of the largest realized value clusters (Glassnode)

Bitcoin’s sits on one of the largest realized value clusters (Glassnode)

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