December 2, 2023


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$20K Bitcoin may return, says analyst as US unemployment hits 54-year low

2 min read

Prior to the opening of Wall Street on February 3, the price of Bitcoin (BTC) experienced a decline due to the release of new economic data from the United States.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

“Think again” over U.S. recession

Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair was fluctuating around the $23,000 support level after erasing earlier gains. The pair was negatively impacted by the January U.S. U.S. unemployment data, which exceeded expectations and led to the lowest overall jobless figures since 1969.

The non-farm payrolls (NFP) data also exceeded expectations, while the average hourly earnings data was in line with the forecasted 0.3% growth. Popular analytics account Tedtalksmacro responded to the data on Twitter, stating “HUGE beat in NFP.”

Tedtalksmacro also mentioned a potential opportunity to increase Bitcoin exposure, given the recent dip in the market, which could take the BTC/USD pair all the way down to $20,000. The firm further added that this could be an opportunity to reload.

However, the stronger-than-expected labor market data implies that the Federal Reserve may maintain tighter, less liquid monetary conditions for a longer period of time, causing Bitcoin to lose momentum. Economist and analyst Jan Wüstenfeld commented that this data suggests that the U.S. economy is not sliding into a recession in the near term.

Source: Bureau of Labor Statistics, U.S. Civilian Unemployment Rate Chart.

$25,000 Bitcoin now “crowded trade”

As reported by Cointelegraph, the Federal Reserve raised interest rates by 0.25% this week, in accordance with most expectations. The announcement generated excitement among market participants as Chair Jerome Powell used the term “disinflation” in his accompanying comments.

In response to the announcement, the BTC/USD pair spiked above $24,000 for the second time in as many days, with market participants remaining optimistic about a potential trip to $25,000 before experiencing a more significant pullback.

Investment research resource, Game of Trades, noted that “BTC has had a clean breakout above its macro downtrend line + a backtest.”

“The next big resistance to clear is the $25k region.”

Source: Game of Trades/Twitter, BTC/USD Annotated Chart.

However, despite the optimism, popular trader Crypto Tony acknowledged that the target of $25,000 may not be realized. In a recent update, he wrote, “$25,000 is my main target, but I am now seeing a lot of people asking for this, and it is becoming a crowded trade.”

It is important to note that the views, thoughts, and opinions expressed in this article are those of the author alone.

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