Bitcoin, Ethereum jump after US jobs report
Important takeaways
- The US labor market remained robust in August despite growing economic concerns.
- Post Bitcoin and Ethereum went higher on Friday after the report.
- Nevertheless, both cryptocurrencies remain in a bearish stance from a long-term perspective.
Share this article
Bitcoin and Ethereum appear to be nearing a major price move as investor sentiment improves following the latest US jobs report.
Make-Or-Break for Bitcoin and Ethereum
Bitcoin and Ethereum have experienced a small boost after the latest report from the US Department of Labor revealed that employment remained solid in August.
US job growth slowed in August but remained strong despite economic concerns and growing fears of a recession. The Labor Department’s report revealed that employers added 315,000 jobs in the past month. The US unemployment rate rose to 3.7% from 3.5% in July, slightly higher than expected.
The data released on Friday appears to have been welcomed by investors. Bitcoin has registered a price increase of around 2% while Ethereum has pulled out and registered a 5% gain at press time. Despite the recent jump, technical factors still point to a steeper correction in the near future.
Bitcoin appears to have broken out of a bearish flag on August 26. This technical formation expects an increase in selling pressure to push BTC to a 44.6% correction towards $11,850. Despite the pessimistic outlook, the top cryptocurrency looks poised for a slight pullback before hitting a lower low.
A decisive daily candlestick near the 10-day moving average of $20,340 could give Bitcoin the strength to rise towards the 50-day moving average of $22,000.
Ethereum also appears to be developing a bearish technical formation on its daily chart. ETH can form the right shoulder of a head-and-shoulders pattern. A rejection from the 50-day moving average of $1,650 could increase the chances of a steeper correction in the near future.
Should this happen and Ethereum drops below the $1430 support level, a 30% correction to $1000 becomes a strong possibility. For ETH to advance higher, it needs to cut through the 50-day moving average to invalidate this bearish thesis. Doing so could induce a rise towards the 200-day moving average of $2,100.
Given Bitcoin and Ethereum’s ambiguity, it’s important to wait for a decisive close above support or below resistance before trying to time their next big price moves.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
For more key market trends, subscribe to our YouTube channel and get weekly updates from our lead bitcoin analyst Nathan Batchelor.
