Bitcoin price is threatening to lift $22,000 as support against the strengthening dollar index (DXY). The leading crypto fell to a three-week low on March 8 after stronger-than-expected jobs data from the US. What’s next?..
US employment data increases impact on BTC price
Data from TradingView shows that the BTC price dropped as low as $21,858 during the day. Bitcoin is currently struggling to hold the $22,000 support and traders’ downside targets are still a long way off from $21,300. Michaël van de Poppe, one of the popular crypto analysts, summed up the current situation by saying, “Bitcoin is not showing the strength I wanted to see at the beginning (there is a slight bounce yesterday)”. The crypto analyst says $23,000 is critical for higher levels:
In this case, some more downside momentum is sought towards the $21.2k lows before a bounce occurs. If we want 30 thousand dollars, we need to convert 23 thousand dollars.
Meanwhile, crypto trader Daan Crypto Trades on Twitter argued that the volatility is thanks to movements in the Bitcoin futures markets. He explained that this “comes with the large bidding depth in the Binance futures pair combined with the quite increase in open interest.”
Macro events yielded mixed results when it came to the bustling crypto market
cryptocoin.com The appearance of Fed Chairman Jerome Powell before the US Congress the previous day did not arouse a reaction, but the employment data of that day turned the market upside down. In part of his comments on the day’s nonfarm payrolls, Van de Poppe wrote:
The expectation for those who were employed was 197 thousand. The real number is 242k, which is more positive than expected… Not good for risk-focused investors as we’ve just heard that Powell plans to raise interest rates further in 2023.
Such “hot” employment figures have traditionally made risky assets uneasy, as they imply the Fed has more room to keep financial conditions tighter for longer.
Dollar hits two-three-month high
Estimates of how much the Fed will raise at the next meeting of the Federal Open Market Committee (FOMC) on March 22 were testament to the growing uncertainty over falling inflation. According to data from CME Group’s FedWatch Tool, the market currently favors a larger 50 basis point rate hike, rather than February’s 25 basis points.
DXY puts bullish whales in reverse for Bitcoin price
The US dollar index (DXY) likewise left Bitcoin bulls in for an unwelcome surprise. After the strong session on March 7, the Index entered consolidation the day after hitting 105.88, its highest level since December 1, 2022.
“Watch DXY… above 106 there is a near-perfect setup for a negative divergent upswing, then at least a major pullback or a drop below 100 has started,” replied trader David Brady.
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