Bitcoin: Favorable NFP Report Could Propel Crypto to $50k - Key Levels to Watch
Investing.com | Jan 05, 2024 11:36
- The crypto markets have begun the new year on a bullish note.
- Bitcoin's recent consolidation faced a setback amid reports hinting at a potential SEC rejection of spot ETFs.
- The crypto could leap toward the $50,000 mark depending on the crucial jobs report.
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The cryptocurrency markets displayed notable activity this week, spearheaded by Bitcoin. Commencing the year on an upward trajectory, Bitcoin initiated a shift to break free from its sideways movement.
However, the optimistic momentum faced a temporary setback due to the emergence of negative speculation in the middle of the week.
Bitcoin experienced a swift uptrend in the final quarter of 2023, fueled by soaring expectations for ETFs. As December unfolded, the leading cryptocurrency embarked on a consolidation phase.
The onset of 2024 hinted at the commencement of a new upward trend. Nevertheless, the prospect was momentarily stalled by reports suggesting that the SEC might reject spot ETFs.
Looking at the daily chart, we saw that the decline on Wednesday continued to the lower band of the horizontal channel that we have been following since December and was met with reaction purchases at this point.
It can be seen that the region, which is considered a buying opportunity zone, was an important support area in the second half of December.
In addition, the short duration of the decline and the fact that the day's close remained above the EMA-21 value, which worked as dynamic support throughout the recent uptrend, was an important sign for recovery.
BTC moved towards the upper band of the horizontal channel after Wednesday's post-decline rebound encouraged investors.
Today, a retest towards the mid-band of the channel took place in the first hours of the day, while demand remained alive in the lower region.
While the $44,100 level is the closest resistance for Bitcoin today, if the cryptocurrency manages to enter the weekend above this resistance, this could re-trigger the bullish movement that took a break at the beginning of the week.
While the short-term EMA has been bullish on the precious Bitcoin, the recent bearish momentum has created a negative on the Stochastic RSI, but a move above the $45,000 resistance at $44,100 would allow this indicator to start generating a bullish signal.
h2 Nonfarm Payrolls Could Induce Volatility/h2
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On the other hand, the release of nonfarm payrolls data today may also lead to volatile movements in the Bitcoin price.
While the ADP Employment data announced yesterday was above expectations, the nonfarm payrolls data coming above the expectation of 170k may put pressure on risk markets.
Higher-than-expected employment data may be considered an important indicator that the US economy continues to remain buoyant.
At this point, Fed may send more hawkish messages at its meeting this month, indicating that it may extend the time to leave the tight monetary policy.
This would lower the expectation of a rate cut in early 2024. Thus, we may see a weakening in demand for cryptocurrency markets due to a possible decline in risk appetite.
h2 SEC's ETF Decision a Make or Break Moment for Bitcoin/h2Still, crypto investors, especially institutional ones, are more focused on the SEC's ETF decision. A possible postponement or rejection will have an impact that will disrupt the bullish setup in Bitcoin.
In this case, the support zone in the $ 41,000 region seems likely to break, while we can see that the first reaction may cause a decline to the $ 37,500 - $ 38,000 range.
The general view in the market is that a decision will be made by January 10 in the ETF approval window opened today. The spread of positive rumors until this process will be one of the factors that will support the rise in Bitcoin.
If the employment data is announced at the expected level and there is no negativity until the decision date, it may enable Bitcoin to test the $ 50,000 region with a jump of more than 10% after staying above the consolidation area.
However, it should be noted that the loss of momentum in the Stochastic RSI, which has been overbought for a long time on the weekly chart, hints that the cryptocurrency may correct toward $ 38,000 before the $ 50,000 target.
This can be confirmed by the retracement of the indicator, which dipped below the overbought zone in the 2023 uptrend, to the middle band of the ascending channel.
Accordingly, we can say that the support zone at $41,000 is still important. However, as long as buyers keep Bitcoin above $44,000, we may see an upward bounce depending on the developments in the coming hours and days.
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