BTC to Remain Under Pressure on Post-US Jobs Report Fed Sentiment

Key Insights:

• BTC had a bearish Friday session, falling to a session low of $27,755 before finding support.
• A fall in the US unemployment rate and in line with expectations nonfarm payrolls raised expectations of a Fed interest rate hike in May.
• However, the technical indicators are mixed, signaling a possible pullback.

On Friday, bitcoin (BTC) fell by 0.46%. Following a 0.48% decline on Thursday, BTC ended the day at $27,889. BTC failed to hold onto the $28,000 handle for the first time in four sessions.

A mixed start to the day saw BTC rise to a first-hour high of $28,083. Falling short of the First Major Resistance Level (R1) at $28,216, BTC fell to a mid-morning low of $27,755. However, finding support at the First Major Support Level (S1) at $27,769, BTC retested resistance at $28,000 before easing back.

US Jobs Report Leaves BTC Range Bound Despite US Futures Gains

The US Jobs Report failed to spur a breakout afternoon session despite a further tightening in the US labor market.

Nonfarm payrolls increased by 236k v a forecasted 239k, with average hourly earnings up 4.2% year-over-year versus 4.6% in February. However, the US unemployment rate fell from 3.6% to 3.5% despite a rise in the participation rate from 62.5% to 62.6%.

The numbers supported a more hawkish Fed and raised the prospects of a May interest rate hike.

According to the CEM FedWatch Tool, the probability of a 25-basis point interest rate hike jumped from 49.2% to 67.0%. The stats supported FOMC member James Bullard’s more hawkish stance.

On Thursday, Bullard said,

“We’ve got a long ways to go, and I think inflation is going to be sticky going forward. It’s going to be difficult to get inflation back down to the 2% target… so we are going to have to stay at it in order to apply pressure to make sure inflation gets back down.”

While the US markets were closed for Good Friday, the NASDAQ mini reversed losses from the session, ending the day up by 13.5 points.

The Day Ahead

Regulatory activity and lawmaker chatter will continue to influence, with the anti-crypto sentiment on Capitol Hill continuing to peg BTC back from the $30,000 handle.

While the crypto market can stomach the rhetoric, SEC or CFTC moves against a leading crypto exchange would test buyer appetite.

Updates from the ongoing SEC v Ripple case and Binance and Coinbase (COIN)-related news will move the dial.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.04% to $27,879. A range-bound start to the day saw BTC fall from an opening price of $27,889 to an early low of $27,879.

Technical Indicators

BTC needs to move through the $27,909 pivot to target the First Major Resistance Level (R1) at $28,063 and the Friday high of $28,083. A return to $28,000 would signal an extended bullish session. The crypto news wires should be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $28,237 and resistance at $28,500. The Third Major Resistance Level (R3) sits at $28,565.

Failure to move through the pivot would leave the First Major Support Level (S1) at $27,735 in play. However, barring a risk-off-fueled sell-off, BTC should avoid sub-$27,500. The Second Major Support Level (S2) at $27,581 should limit the downside. The Third Major Support Level (S3) sits at $27,253.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a mixed signal. BTC sat above the 100-day EMA ($27,638). The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA, sending mixed signals.

A move through the 50-day EMA ($28,020) would support a breakout from R1 ($28,063) to target R2 ($28,237) and $28,500. However, a fall through S1 ($27,735) would bring the 100-day EMA ($27,638) and S2 ($27,581) into view. A move through the 50-day EMA would send a bullish signal.