Will Nonfarm Payroll Data Extend Bitcoin Price Correction or Trigger Recovery to $70K?
The United States Bureau of Labor Statistics (BLS) will be releasing the monthly Nonfarm Payroll (NFP) report on August 2 as Bitcoin and altcoins such as Ethereum, Solana and Dogecoin struggle to find direction.
Cryptocurrencies continue to sustain losses this week amid rising geopolitical tensions in West Asia. Besides, investors did not buy the dovish stance fronted by the Federal Reserve on Wednesday, leaving interest rates at 5.25% – 5.5%.
NFP Explained: How Nonfarm Payroll Impacts Crypto Prices
The NFP report measures the change in the number of US jobs created or lost in a month. Released on the first Friday of each month at 8:30 AM EST, it’s a crucial economic indicator. Economists use this data to gauge the country’s economic health as it directly reflects growth, consumer spending, and total economic activity.
Higher NFP figures—above expectations are viewed as positive for the US dollar but pose immense risk for volatile assets like Bitcoin, stocks, and crypto. A stronger NFP will trigger a US dollar rally which means risk off and eventually a Bitcoin price crash.
Subsequently, Bitcoin will benefit should the Nonfarm Payroll report come out lower than expected, exerting pressure on the US dollar. This may culminate in a weaker currency, bolstered by several interest rate cuts before the end of 2024, which could significantly bump up the progress of risk assets. Consistent interest rate cuts would drive Bitcoin price as the US economy slows down.
The overall general expectation is that July’s Nonfarm Payroll data today will increase by 175k following a 206k jump in June and further clear the course for several interest rate cuts before the end of the year.
Bitcoin Price Bounces Back Targeting $70,000
Bitcoin price is back to trading above the 200-day Exponential Moving Average (EMA) in purple on the four-hour chart after bulls fiercely defended $62,000 support on Thursday. From the Money Flow Index (MFI), which, despite falling to the oversold region, has recovered to 29, BTC price could slowly regain momentum, targeting the psychological resistance at $70,000.
Traders will look out for a daily close above $65,372—the previous day’s open and, subsequently, the 20-day EMA in blue to validate the reforming trend reversal. A break above $66,000 support/resistance will reinforce the bullish grip as traders target two key levels at $68,000 and $70,000.
Bitcoin price chart | Tradingview
The validation of a rising wedge pattern, which formed as the price hit four higher lows and four higher highs, hints at a 13% drop to $58,000. This target is determined by measuring the distance between the first swing high and the first swing low.
More traders will switch to BTC shorts if support at $64,000 fails. This will open the door for losses to $62,000—a dangerous maneuver that could, according to this BTC price forecast, drive the coin to $58,000 after the Nonfarm payroll data release.
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Filed under: News - @ August 2, 2024 12:44 pm