138 Interactions, 4 Today
Bitcoin bulls continue under pressure below $50,000 in a week that will shed additional information on the Federal Reserve’s taper stance based on non-farm payroll data.
The significant selling in the US dollar market at the conclusion of last week aided Bitcoin (BTC) in breaking beyond $49,000. However, BTC struggled to break through $50,000, a psychological resistance level, as investors remained wary over the timing of the Federal Reserve’s taper.
In detail, the Fed chairman Jerome Powell delivered a mildly dovish outlook during his speech on Friday at the annual Jackson Hole symposium. At one point, he refrained from providing hints regarding when the Fed would start unwinding its $120 billion a month asset purchasing program.
Powell noted that they would begin tapering sometime by the end of 2021, albeit admitting that the fast-spreading Delta variant of the Covid-19 could play spoiler.
“We will be carefully assessing incoming data and the evolving risks,” he said.
“Timing and pace of taper will not be intended to carry a direct signal regarding the timing of interest rate liftoff.”
At the same time, the U.S. Bureau of Economic Analysis reported that annual Core Personal Consumption Expenditures (PCE) Price, which the Fed considers its preferred inflation metric, remained unchanged at 3.6%, about 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 could directly or indirectly impact Bitcoin and the rest of the crypto market.
But on Sep. 1, the Automatic Data Processing (ADP) Research Institute will reveal August’s private sector employment data. Additionally, investors will likely watch the ISM Manufacturing PMI for its Prices Paid component. In doing so, they could gauge input price pressures in the manufacturing sector to determine inflation.
On Friday, the Non-farm Payroll (NFP) data expects to show that the U.S. economy added 763,000 jobs in August, about 19% lower than July’s print of 943,000. As a result, disappointing job data could delay the Fed’s decision to taper its asset purchase program and help boost the price of risk assets, including Bitcoin.
Technically, Bitcoin has been rising within a short-term ascending channel, indicating a move towards the lower trendline (around $47,000) with a possible pullback towards the higher trendline (above $50,000).
An extended sell-off below the Channel’s lower trendline could send BTC/USD exchange rates plunging towards the 200-4H exponential moving average (200-4H EMA; the yellow wave) at around $44,600.
The negative target appears to be closer to the weekly chart.
Following a 75.36 percent bullish rise, the BTC/USD exchange rate has been testing the 0.786-line (around $50,779) of the Fibonacci retracement graph. As a result, a sustained drop from the aforementioned price barrier places Bitcoin’s next downside target near the 0.618-Fib line (about $43,886).
A neutral RSI reading (below 70) on the other hand, may help the bulls recoup $50,000 for a bullish breakthrough move. As a result, they could aim for levels near $60,000 as their next upside goal.