BREAKING: Bitcoin Spikes on Falling U.S. Jobless Claims
Price volatility in the bitcoin market returned on September 16, with a report showing a surprisingly large drop in the weekly jobless claims. Traders are also analyzing the recent rate hike by the Federal Reserve and other economic data to inform their bitcoin trading decisions. (Reuters)
Jobless Claims at 196,000
The Labor Department reported that initial, or new, jobless claims for the week ending September 12, were 196,000. This was a decrease of 10,000 from the prior week’s claims of 206,000. Economists expected claims to average around 207,000. The four week moving average of jobless claims was 203,300, showing that lay offs remain low.
As claims under 300,000 show a tight labor market and signify that the labor market can withstand restrictive monetary policy, traders focus on the four week average when analyzing the labor market.
Market Conditions for the Fed
With labor market data showing signs of improvement, the Fed can keep interest rates high for longer if they help bring down inflation.
The data was published a few weeks after the FOMC Meeting on September 16. During this meeting, the Fed increased its target range for the federal funds rate by 25 basis points to a range of 3.75% – 4.00%. In its statement, the Fed indicated that the economy was still growing, and, among other things, noted that inflation was still too high. ([Federal Reserve][1])
In its forecast, the Fed indicated that, by the end of 2026, it expected that the fed funds rate would be at 4.1%. During the same period, it expected that the unemployment rate would be at 4.1%. ([Federal Reserve][2])
Bitcoin Price Movement following US Jobs Report
Immediately following the release of the jobs report, which showed that first-time claims for unemployment benefits came in at 225,000, the Bitcoin price increased. Traders anticipated that the positive jobs report would lead to an improvement in risk sentiment, and lessen expectations for an aggressive easing of monetary policy. Later in the day, Bitcoin was trading between $76,000 and $76,500. Both effects could be positive for Bitcoin in the near-term.
Bitcoin Price Trends
Traders are also mindful of the recent price action. According to analysts, Bitcoin could face resistance at $77,500. Beyond that, it could face resistance between $80,500 and $81,200. Some traders believe that if Bitcoin can rise above these levels, it could retest its all-time highs.
The $75,500-$76,000 area is another important region to keep an eye on in the short term, after Bitcoin recently bounced from around $75,584.
It’s important to track recent economic and employment data released by the U.S. as well as the pending decisions by the FED and other central banks to determine the near term direction of cryptocurrencies and other risk assets.
Bitcoin could also continue to see a range bound move, due to ongoing job market strength, elevated inflation and interest rate increases by central banks. The strength in the U.S. dollar may put further downward pressure on Bitcoin and other risk assets. Bitcoin holders may also continue to be sellers on rallies until they see stronger support levels in the low to mid $20,000 range.
In this version we incorporate the claims number, Fed rate decision, year end inflation forecast, Bitcoin and other cryptocurrency price levels and other important technical levels.
