According to data from the US Bureau of Labor Statistics, the US labor market significantly slowed down in April, with only 175,000 new jobs added, far below the expected 240,000. At the same time, the unemployment rate rose to 3.9%, slightly higher than the expected 3.8%. Both hiring and wage growth slowed more than economists had anticipated.
This report triggered a rebound in the entire financial market, as investors saw these data as a signal for the Federal Reserve to start cutting interest rates. Investor expectations of rate cuts boosted the US stock market, with major indices closing higher this week. At the close, the S&P, Dow Jones, and Nasdaq indices rose by 1.26%, 1.18%, and 1.99% respectively.
Bitcoin rebounded from its support level of $59,000 in afternoon trading and reached an intraday high of $63,245, according to Bitpush data. As of the time of writing, the BTC trading price was $62,877, with a 24-hour gain of approximately 7%.
Altcoins showed strong performance, with only 10 out of the top 200 tokens experiencing losses, and only 3 of them dropping by more than 2%. Archblock (ABT) had the highest increase, rising by 33.4% to $3.54, followed by ZetaChain (ZETA) with a 20.1% increase, and ORDI (ORDI) with a 16.7% increase. GuildFi (GF) had the largest decrease, declining by 9.6%, followed by Jito (JTO) with a 3.6% decrease, and Arweave (AR) with a 2.2% decrease.
The current total market capitalization of cryptocurrencies is $2.31 trillion, with Bitcoin’s dominance rate at 53.2%.
Possibility of rate cut in September
Many market participants believe that the economic decline means the Federal Reserve will cut rates faster.
Richard Flynn, Managing Director of JXC UK, stated in a report that the weaker-than-expected US employment report could put pressure on the Federal Reserve to cut rates: “In recent months, it has become clear that the Federal Reserve is happy to slowly take action in reducing the interest rate cycle, but unexpected and unexpected weakness in the economy, as we saw today, may cause a shift in this approach. A significant drop in the labor market could push the Federal Reserve from a walk to a sprint.”
James Knightley, Chief International Economist at ING, stated in a report on Friday, “Given the current situation, we will stick to the decision of the Federal Reserve to cut rates in September.”
Rate cuts can boost risk assets such as Bitcoin because they can lower borrowing costs and encourage investors to seek higher returns in higher-risk assets. Additionally, lower interest rates could weaken the value of fiat currencies like the US dollar, prompting investors to turn to alternative stores of value such as risk assets.
The CME FedWatch tool shows that the market believes there is a 72.6% chance of a rate cut in September, higher than yesterday’s 61.6% and last week’s 57.3%, but lower than last month’s 93%.
Neil Roarty, an analyst at Stocklytics, said, “Since February, when the Bitcoin trading price fell below $60,000 for the first time, there have been various reasons cited for the decline, including the rise in gold prices and the outflow of funds from the same batch of Bitcoin ETFs that drove gold prices up earlier this year. But the reality may be simple, just like retail investors taking profits after a significant increase in value.”
He added, “All of this resulted in a roughly 15% decline in the Bitcoin price in April, but taking a step back, the value of the world’s most popular cryptocurrency has still more than doubled in the past seven months. The future trend may depend on broader economic factors, especially the rate cuts in the US. If rate cuts, as expected, come later this year, it will make ‘risky’ assets like Bitcoin more attractive.”
Bitcoin’s key resistance level remains at $64,000
Bitcoin fell below $60,000 before the halving event on April 20, then rebounded slightly and fell again, fluctuating within a range.
Independent trader Eliz stated that even if BTC rebounds from below $60,000, the obstacles to overcome are still the same. The trader explained that $62,000 is a key level on the BTC daily chart.
Cryptocurrency KOL Lark Davis pointed out the resistance that Bitcoin is facing against the 100-day EMA on the daily chart, with the current price at $59,972. The next major resistance is the 50-day moving average, currently at $63,902. Analysts believe that there will be a battle between bulls and bears at this level.
Data from market intelligence company IntoTheBlock supports this view. Their In/Out of the Money Around Price (IOMAP) model shows that the 50-day EMA is within the price range of $62,858 to $64,670, with about 1.56 million addresses previously purchasing approximately 577,220 BTC.
The same IOMAP chart shows strong resistance on the way up for Bitcoin compared to the support received on the way down.
Legendary trader Peter Brandt stated that Friday’s increase may be a signal that a Bitcoin rebound is imminent, as it was able to hold and rise from the support level of $59,000, which fits a “very common continuation chart structure in a bull market.”
Author: Mary Liu, Bitpush News
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Tags: 2023 market, rate hike, employment, altcoins, bull market, Federal Reserve, market trend, rate cut, Powell
Disclaimer: All articles from Bitpush represent the author’s viewpoint and do not constitute investment advice.
Original Article Link: https://www.bitpush.news/articles/6668232
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