On January 11th, the price of Bitcoin (BTC) remained below $95,000 following a day marked by significant events that triggered a somewhat pessimistic response in the market.
Bitcoin, stocks hint at “overreaction” to US jobs data
During the last trading session on Wall Street, fluctuations in volatility were observed based on data gathered from CryptoMoon Markets Pro and TradingView for the concluding part of the week.
Initially, the release of US employment data caused Bitcoin’s value against the US dollar to trend towards $92,000. However, a sudden recovery followed, resulting in a significant increase of $2,000 per hour and new temporary highs. After this period of volatility, Bitcoin’s price action stabilized, returning to a well-known short-term price range.
According to CryptoMoon’s report, a variety of risky assets experienced losses as markets adjusted their expectations for fewer than two interest rate reductions by the U.S. Federal Reserve by 2025. Consequently, the S&P 500 and Nasdaq Composite Index closed on January 10 with declines approximately 1.5%.
After the event transpired, certain market analysts posited that the situation might stabilize with a positive outlook for the bulls.
Charles Edwards, the founder of Capriole Investments’ quantitative Bitcoin and digital asset fund, noted in a post that markets are showing signs of anxiety due to exceptionally strong employment data.
“Short-term it’s a bearish overreaction as less jobs = more leeway for rates to stay high. BUT strong jobs numbers like today actually means the bull run can likely go a lot longer than thought.”
Edwards observed that some characteristics of the stock market plunge after the March 2020 COVID-19 outbreak resembled the post-crash landscape in various markets.
“This was the most outstanding piece of reading material in the past six months, effectively dismissing any likelihood of unemployment hitting a bottom at this time. Moreover, take a look at today’s extraordinary intraday put-call ratio, reaching levels comparable to those during the Covid crash.” He continued with a graph of the S&P 500 for emphasis.
“Another bounce soon?”
As an analyst, I’ve noticed another indicator of changing sentiment: wagers on a rate cut at the Federal Reserve’s meeting in late January. At the moment of my analysis, according to data from CME Group’s FedWatch Tool, these bets stood at 6.4%. This percentage is larger than the 2.7% observed just yesterday, suggesting that market expectations for a rate cut are on the rise.
The unemployment rate turned out to be better than anticipated, but the treasury markets and yields appear to be at a critical juncture, showing signs of strain,” said crypto trader, analyst, and entrepreneur Michaël van de Poppe in his analysis on topic X.
“The yields can’t really go way higher & the initial response is already captured. Very likely we’ll see an upwards trending market starting in the next 10-15 days on Bitcoin and the altcoins.”
Bitcoin and crypto test critical support
A few perspectives suggest that Bitcoin must deliver stronger bullish results to prevent an extended period of bearish trends.
Included in the group was the well-known Bitcoin data analytics account, Bitcoindata21, who predicted that a drop to prices under $90,000 could pose significant issues.
If Bitcoin reaches $88,000 and causes the overall cryptocurrency market to drop by 5-10%, I’d prefer to observe a swift rebound before the end of the week, according to their statement to their followers.
As a crypto investor, I noticed that a chart alongside displayed the Relative Strength Index (RSI) readings for the overall crypto market capitalization on a weekly basis. These RSI readings were “situated near the trend channel support,” suggesting potential stability or even recovery in the coming weeks.
Previously, a different post pointed out that the two significant price adjustments for Bitcoin (BTC) against the U.S. Dollar since reaching its recent peak of $108,000 in mid-December exhibited similar characteristics.
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2025-01-11 16:45