Bitcoin is near a key level. How jobs data could lead to another rally.
Bitcoin
and other cryptocurrencies were little changed on Friday as the key monthly US jobs report emerged. With digital assets at key technical levels – and vulnerable to macroeconomic forces – there is potential for volatility ahead.
The price of Bitcoin has held steady over the past 24 hours at close to $29,100, staying below $30,000, which it topped in April for the first time since last June, amid a rally that has taken it around 70% higher this year. Bitcoin has since failed to consolidate above $30,000, seen as technically and psychologically important because it represents where prices stood before the stress of the bear market.
“The first cryptocurrency overcame a sharp decline on May 1 and is now testing downside resistance through last month’s local highs,” said Alex Kuptsikevich, an analyst at broker FxPro, referring to the zone near $30,000 that Bitcoin has been fighting to reclaim. “A consolidation above this level would be a significant signal to buyers and could trigger a bullish wave.”
The US jobs report for April is ahead as a key catalyst, and is likely to fluctuate
Dow Jones Industrial Average
and
S&P 500
as much as Bitcoin. As risk-sensitive assets, both stocks and cryptos are vulnerable to macro forces that could shape the future of Federal Reserve monetary policy. The central bank’s aggressive tightening of financial conditions – this week it raised interest rates for the 10th time in 14 months – has been a driving force behind falls across both stocks and Bitcoin.
Markets are pricing in a decent chance that the Fed’s quarter-point rate hike this week will be its last, but the central bank has said it will continue to look at data to guide its inflation-fighting campaign. Labor market tightness has remained an inflationary force and has weighed heavily on the monthly US jobs report in recent months.
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Economists surveyed by FactSet expected the U.S. to have added 180,000 jobs last month, down from 236,000 in March. Alongside the number on the headlines, investors want to see other signs that the tightness in the labor market is easing, for example in wage growth.
“A stormy week for global markets will come to a crescendo today,” said Marios Hadjikyriacos, analyst at broker XM. “With markets now pricing in almost even odds that the Fed will cut interest rates in July, the stakes are high.”
Beyond Bitcoin,
Ether
-the second largest crypto- was flat at $1,900. Smaller cryptos or altcoins were slightly weaker, with both
Cardano
and
Polygon
down 1%. Memecoins showed similar action, with
Dogecoin
and
Shiba Inu
each departure 1%.
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Write to Jack Denton at [email protected]
