Bitcoin (BTC) set new multi-week lows after Fridays Wall Street open as BTC price action diverged from stocks.
Key points:
- Bitcoin fell to $74,762 after the start of Fridays US trading session, its lowest level since Aug. 21.
- Investors piled into tech stocks after Thursdays sell-off, with the Nasdaq Composite Index gaining 1.8% in the first hour.
- BTC price analysis warned that $69,000 could return if 50-week trend line support gave way.
Bitcoin extends losses after US jobs data beats forecasts
Data from TradingView showed BTC/USD dipping below $75,000 to levels last seen in mid-August. The total crypto market cap was down 0.5% on the day.
BTC/USD one-hour chart. Source: Cointelegraph/TradingView
US stock markets rebounded as traders took advantage of heavily discounted tech shares. The S&P 500 and Nasdaq Composite Index traded up 0.6% and 1.2%, respectively, at the time of writing.
Nasdaq Composite Index one-hour chart. Source: Cointelegraph/TradingView
Certain tech stocks saw much sharper gains, with SanDisk and Micron Technologies both up 6.3%.
US nonfarm payrolls data released on Friday showed that the economy added 165,000 jobs in October, well above market expectations of 65,000. Septembers 29,000 figure was also revised upward to 60,000.
“Employment increased in professional and business services, in health care, and in transportation and warehousing,” an official release from the US Bureau of Labor Statistics (BLS) reported, adding that the unemployment rate was now 4.1% versus a predicted 4.2%.
US civilian unemployment rate. Source: BLS
Stronger labor-market performance can create a headwind for crypto and risk assets as it suggests that the economy can manage any financial policy tightening, which in turn can reduce liquidity inflows to the market.
On the back of the latest data, expectations of the Federal Reserve hiking interest rates by 25 basis points at its December meeting increased from 66.9% to 76.8%, per data from CME Groups FedWatch Tool.
Fed target-rate probability comparison for December FOMC meeting (screenshot). Source: CME Group
Related: Heres what happened in crypto today
Analysis sees potential BTC price drop to $69,000
Bitcoin tested support around its 50-week simple moving average (SMA) at $77,533.
BTC/USD one-day chart with 50-week SMA. Source: Cointelegraph/TradingView
In his latest market analysis, Keith Alan, cofounder of crypto trading platform Material Indicators, warned of the consequences of losing the trend line, which has acted as support since mid-September.
“As strong as this support level looks from both a technical and structural perspective, we cant confirm its durability before the W close,” he wrote on X, referring to the weekly candle close.
Alan saw a drop to as low as $69,000 for BTC/USD should the area around $75,500 fail to hold. A recovery, he said, depended on the pair producing a series of higher highs and higher lows on lower time frames.