Bitcoin’s (BTC) 200-day simple moving average (SMA), a crucial gauge of the cryptocurrency’s long-term health, is poised for a critical shift. This indicator, which has been a reliable barometer for Bitcoin’s trajectory, is showing signs of losing its bullish momentum as we approach key U.S. jobs data expected to influence the Federal Reserve’s interest rate decisions.
Since late August, the 200-day SMA has exhibited a lackluster daily increase of under $50, a stark contrast to the $200-plus gains seen earlier in the year, according to TradingView. As of the latest data, the SMA stands at $63,840, while Bitcoin’s spot price hovers around $55,880. This reduction in volatility signals a potential stall in bullish momentum, marking the first such occurrence since October of the previous year.
Adding to the bearish sentiment, short-term moving averages, such as the 50-day and 100-day SMAs, have recently peaked and begun to decline. The crossover of the 100-day SMA falling below the 200-day SMA further confirms a bearish trend, painting a cautious picture for Bitcoin enthusiasts.
“Looks pretty ugly out there right now, [with the] market rapidly pricing global recession risks,” LondonCryptoClub noted in a recent update on X. Despite these grim indicators, the final downturn in Bitcoin’s price could potentially set the stage for a more significant rally, according to their analysis.
Market sentiment is further strained by broader financial anxieties. Alex Kuptsikevish, a senior market analyst at The FxPro, highlighted that the current risk-off mood in the financial markets isn’t benefiting Bitcoin as it might be gold. “Despite the dollar’s weakness, the financial markets are still in an anxious and expectant mood, which is not helping Bitcoin as much as it is helping gold,” Kuptsikevish stated. He identified a crucial technical support level for BTC at just above $54,000, with a possibility of a brief dip below $53,000 if volatility spikes.
The daily chart also reveals significant support around $50,000, marked by a trendline connecting corrective lows from May and July. Several market observers, including Arthur Hayes, co-founder of BitMEX, predict Bitcoin could fall to this support level. “BTC is heavy, I’m gunning for sub $50k this weekend. I took a cheeky short. Pray for my soul, for I am a degen,” Hayes posted on X.
Also Read: Bitcoin Dips Below $56K – Nonfarm Payrolls Miss Expectations, Impact On BTC & DXY
The impending U.S. nonfarm payrolls (NFP) report for August could amplify Bitcoin’s price volatility. FXStreet reports an expected 160,000 increase in jobs, up from July’s 114,000, with a projected drop in the jobless rate to 4.2% from 4.3%. A weaker-than-expected report might heighten recession fears and increase the likelihood of a 50 basis point interest rate cut by the Fed, potentially stabilizing risk assets, including Bitcoin. However, traders should remain vigilant for potential growth scares similar to those experienced in August, which could impact both stocks and cryptocurrencies.
As Bitcoin navigates these turbulent waters, the interplay between macroeconomic indicators and technical signals will be crucial in determining its next move.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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