As a seasoned analyst with over two decades of market experience under my belt, I can’t help but feel a sense of deja vu watching Bitcoin dance on the edge yet again. The last time we were here, the music was different, but the dance is eerily familiar.
Bitcoin (BTC) hovers near a critical point once more. The current level of approximately $55,800 appears to be its last line of defense. Should the price drop below this support, there seems to be no immediate barrier to prevent it from sliding down to around $52,000. Is a significant decline imminent?
Jobs data out on Friday – 50 basis point rate cut becoming likely?
As a researcher, I eagerly wait for the upcoming non-farm payroll report due out this Friday, yet the current state of the U.S. stock market suggests caution. Regrettably, there seems to be little optimistic news on the horizon that could potentially boost the Bitcoin price.
The U.S. employment statistics have become the main focus for the Federal Reserve, replacing inflation as their primary concern. The latest figures, particularly the subsequent adjustments showing a decline, are causing significant worry. Notably, the CME Fedwatch tool, which indicates the market’s predictions for future Fed interest rate reductions, suggests that the market is increasingly convinced that a 0.5% rate cut this month is becoming more likely than the Federal Reserve’s projected 0.25%. Currently, there’s a 45% chance of a 0.5% cut compared to a 55% likelihood of a 0.25% cut.
At the Spot Bitcoin ETFs, things seem to be on a downward trend as well. On Thursday alone, about 3,640 Bitcoins were withdrawn from these ETFs, marking the seventh consecutive day with net sales.
Short term price in downward-sloping wedge
In the near future, the Bitcoin price appears to be following a descending triangle pattern. Whether this trend continues and the price drops below the pattern’s base, or if the base along with horizontal support can prevent a fall, is yet to be determined.
If the price drops below the current level significantly, it’s highly probable that it will head straight towards the $51,000 support. But if this support manages to withstand the pressure, the pattern suggests a positive outlook, and a surge above the upper boundary of the wedge could offer some relief to the bulls. The upcoming hours are crucial.
$51,500 lines up perfectly with fib level
Looking at the larger, monthly timeframe gives us a clearer perspective on possible targets during this market downturn. Right now, we’re approaching critical support levels. If the price drops below here, it will align perfectly with the 0.382 Fibonacci retracement level, which is approximately $51,500.
If the price reaches this flat point, considering the overall market situation, it’s quite common to see such a dip and a rise from this level would be optimistic. However, if the price slips past this $42,000 support and heads downwards, there’s a significant support at approximately $38,000, which is determined by a key Fibonacci level.
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2024-09-06 13:02