The crypto market has regained some stability, with Bitcoin (BTC) rising back to nearly $95,000 as order books signaled the presence of bargain hunters. Late Wednesday, prices tested the long-standing support zone of $90,000-$93,000, which has successfully halted downward movements at least six times since the second half of November. This latest bounce will be tested by Friday’s U.S. nonfarm payrolls report, which is anticipated to show an addition of 164,000 jobs in December, following November’s gain of 227,000.
Fed Fears Loom Large
The upcoming jobs data is crucial as it could add to the existing hawkish Federal Reserve fears, further increasing inflation-adjusted bond yields. These yields have been rising due to inflation worries, complicating matters for risk assets like Bitcoin. The inflation scare and rates volatility likely catalyzed BTC’s rapid descent from $102,000 to $93,000 in the past four days.
To illustrate just how bearish sentiment was early today, the funding rate in perpetual markets turned negative, representing a dominance of shorts, that too at a time when BTC is just 15% away from its record high. The prevalence of the Fed-led pessimism means any sign of weakness in the payrolls figure will likely trigger sharp market reactions.
Potential for a Bullish Breakout
If the jobs data misses estimates by a wide margin, it could revive the case for Fed rate cuts and shift sentiment markedly in favor of risk assets. In such a scenario, BTC could easily make another attempt at $100,000, provided the U.S. government, which holds approximately $18.50 billion worth of BTC, refrains from flooding the market with offers to sell.
The crypto market’s reaction to the upcoming nonfarm payrolls report will be a key litmus test for sentiment. A strong jobs print could embolden Fed hawks, while a weak number may be just what the doctor ordered for Bitcoin bulls.
– Omkar Godbole, CoinDesk Markets Editor
Key Levels to Watch
On the technical front, Bitcoin needs to move above $102,750, the lower high or the right shoulder created Monday, to signal a renewed bullish outlook. A UTC close under the $90,000-$93,000 support zone would confirm a bearish head-and-shoulders pattern and shift focus to deeper support at $75,000.
- Resistance Levels: $102,750 (right shoulder), $100,000 (psychological level)
- Support Levels: $90,000-$93,000 (key demand zone), $75,000 (deeper support on H&S breakdown)
Market Movers
In other market developments, AI-related tokens like aiXBT, Cookie DAO’s COOKIE, and ChainGPT led the gains with rises of up to 50% on Binance spot listings. The viral ai16z token was up 11% and the Agents NFT category outperformed with an 8% average increase. An upcoming deposit vault on the Berachain network hit $1.1 billion in holdings, while major blockchain proposals like Arbitrum’s AIP for a permissionless validator system also garnered attention.
As the crypto community awaits the U.S. jobs data with bated breath, the interplay between macroeconomic forces, Bitcoin’s technical outlook, and the market’s appetite for risk will be on full display. Buckle up for an action-packed Friday that could set the tone for the crypto market in the weeks ahead.
In other market developments, AI-related tokens like aiXBT, Cookie DAO’s COOKIE, and ChainGPT led the gains with rises of up to 50% on Binance spot listings. The viral ai16z token was up 11% and the Agents NFT category outperformed with an 8% average increase. An upcoming deposit vault on the Berachain network hit $1.1 billion in holdings, while major blockchain proposals like Arbitrum’s AIP for a permissionless validator system also garnered attention.
As the crypto community awaits the U.S. jobs data with bated breath, the interplay between macroeconomic forces, Bitcoin’s technical outlook, and the market’s appetite for risk will be on full display. Buckle up for an action-packed Friday that could set the tone for the crypto market in the weeks ahead.
