What to Take Away
- After closing more than 3% lower yesterday, Bitcoin lost ground in early trading on Friday as investors prepared for the highly anticipated August jobs report, a crucial piece of economic data that could influence the cryptocurrency’s next move.
- Since reaching its peak in March of this year, BTC has traded in a channel-like pattern, with the price recently moving toward the pattern’s lower trendline.
- On the Bitcoin chart, investors should keep an eye on important support levels at $53,000 and $47,000, as well as important resistance levels at $65,000 and $68,500.
- After closing more than 3% lower yesterday, Bitcoin (BTC) lost ground in early trading on Friday as investors prepared for the highly anticipated August jobs report, which is due this morning and is a crucial piece in determining the timing and size of widely anticipated interest rate cuts by the Federal Reserve later this month.
A weaker-than-expected employment reading may raise the possibility of a 50-basis-point cut in the influential federal funds rate, despite market participants’ expectations of a 25-basis-point decrease. The legacy cryptocurrency, which has lost around 24% since reaching its record high on March 14, could benefit from rate cuts because there aren’t any new stories that would encourage bullish sentiment.
In the following, we’ll focus on Bitcoin’s technicals and identify crucial support and resistance chart levels to keep an eye on.
Conditions of Rangebound Exist.
Since reaching its highest point in March of this year, Bitcoin’s price has oscillated in an orderly channel-like pattern, repeatedly testing the rangebound-period’s upper and lower trendlines over the past six months.
However, more recently, the cryptocurrency is currently trading back toward the pattern’s lower trendline after a rally from the channel’s lower levels last month fizzled around the 200-day moving average (MA). Friday morning, Bitcoin was trading around $56,000.
It is also important to note that Bitcoin volumes on Coinbase (COIN), the largest cryptocurrency exchange in the United States, are still significantly lower than they were earlier in the year. This makes it more likely that there will be sudden price changes because there is less liquidity.
Investors should keep an eye on a few key areas on the Bitcoin chart that are likely to attract attention in the future.
Levels of Support to Watch
Keep an eye on the $53,000 level if Bitcoin’s price continues to fall. This is a level on the chart just below the channel’s lower trendline where the cryptocurrency may find support near a narrow consolidation range that followed an impulsive move higher in February.
Bitcoin bulls may step in to defend a range of comparable trading levels positioned slightly below the January swing high in the event of a breakdown below this crucial technical level.
Monitoring Levels of Resistance
Investors should keep an eye on the $65,000 level in the event of an upside reversal. The flattening 200-day MA and the previous month’s high would likely impede a rally into this region.
Bitcoin’s price could return to the $68,500 area if a successful close above this level is achieved. Traders who have purchased recent lows may be pleased to lock in profits near the upper trendline of the channel and the July peak.
Investopedia’s comments, opinions, and analyses are for informational purposes only. For more details, see our warranty and liability disclaimer.
None of the aforementioned securities are owned by the author as of the date this article was written.
