Wednesday, September 28

Why a $ 50K retest is likely ahead of Friday’s US employment data.


The strong sell in the US dollar market late last week helped Bitcoin (BTC) break above $ 49,000. However, BTC struggled to extend its rise above $ 50,000, a level of psychological resistance, as investors remained wary of the Fed’s drawdown time.

Bitcoin corrects after posting its week-to-date high of $ 49,667. Source: TradingView.com

In detail, Fed Chairman Jerome Powell delivered a slightly moderate perspective during his speech Friday at the annual Jackson Hole symposium. At one point, he refrained from hinting at when the Fed would begin rolling back its $ 120 billion-a-month asset purchase program.

Powell noted that they would start tapering off sometime by the end of 2021, although admitting that the fast-spreading Delta variant of Covid-19 could be a spoiler.

“We will carefully assess incoming data and evolving risks,” he said.

“The timing and pace of the reduction will not be intended to convey a direct signal about when interest rates will take off.”

At the same time, the US Bureau of Economic Analysis reported that the annual Price of Basic Personal Consumption Spending (PCE), which the Fed considers its preferred inflation metric, was unchanged at 3.6%, roughly 1.6%. higher than the central bank’s intended target.

Things to focus on next week

The first half of the week has no major macroeconomic events that can directly or indirectly affect Bitcoin and the rest of the crypto market.

But on September 1, the Automatic Data Processing Research Institute (ADP) August Private Sector Employment Data Reveal. Also, investors will likely look at ISM’s Manufacturing PMI for its price paid component. In doing so, they could measure input price pressures in the manufacturing sector to determine inflation.

On Friday, Non-Farm Payroll (NFP) data hopes to show the US economy added 763,000 jobs in August, about 19% less than the July print of 943,000. As a result, disappointing labor data could delay the Fed’s decision to cut its asset purchase program and help boost the price of risky assets, including Bitcoin.

Technical setup

Technically, Bitcoin has been trending within a short-term ascending channel, hinting at a move towards the lower trend line (near $ 47,000) for a possible pullback towards the upper trend line (above $ 50,000).

Bitcoin 4-hour price chart with ascending channel pattern. Source: TradingView.com

An extended sell-off below the Channel’s lower trend line could risk crashing the BTC / USD exchange rates towards the 200-4H exponential moving average (200-4H EMA; the yellow wave) at close to $ 44,600.

Related: Bitcoin In Line For ‘Phenomenal’ Weekly Close If BTC Price Holds $ 49K

The downside target appears closer to that visible on the weekly chart.

Bitcoin weekly price chart setup. Source: TradingView.com

The BTC / USD exchange rate has been testing the 0.786 line (near $ 50,779) of the Fibonacci retracement chart following a 75.36% bullish move. As a result, an extended retracement move from said price ceiling brings Bitcoin’s next downside target closer to the 0.618-Fib line (around $ 43,886).

Conversely, a neutral RSI reading (below 70) can help the bulls regain $ 50,000 for a bullish breakout move. In doing so, they could target levels near $ 60,000 as their next bullish target.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade move involves risk, you should do your own research when making a decision.