Bitcoin Weekly Review
In the New Year's week from January 2 to 8, Bitcoin maintained a sideways movement. Since the beginning of the year, it has been trying to develop an upward movement, but has remained trading below $17,000. The key events of the outgoing week were the minutes of the FOMC meeting and the report on the US labor market for December.
After the publication of the FOMC minutes on Wednesday (January 4), the BTC/USDt pair rose to $16,991 without continuing to grow. The subsequent drop in the S&P500 index caused a corrective movement in bitcoin to $16,777. The correction was restrained as investors' attention immediately turned to the US labor market report for December.
Members of the FOMC are pleased with the decline in inflation in October and November, but would like to see more evidence of inflation peaking. As such, they have ruled out a rate cut in 2023. Because of this, investors did not attach importance to the protocols, because they do not understand whether there is a recession in the US now or will begin in the coming months, and what leading indicators to follow in order to predict future actions of the US Federal Reserve.
On Friday (January 6), US stock indices recovered after the release of statistics on the US labor market. As a result of the day, the S & P500 index rose by 2.27%, the Nasdaq index - by 2.56%. Against the background of the absence of negative news in the crypto industry during the week, Bitcoin followed the American stock indices. The BTC/USDt pair recovered to $17,041.
In December, the number of jobs in the non-agricultural sector amounted to 223 thousand, while the forecast was 200 thousand. The November figure was revised to 256 thousand from 263 thousand. The unemployment rate fell by 0.1 percentage points, to 3.5%. The average salary increased by 0.3%.
The data came out better than expected, while the dollar immediately moved south. It was a little strange to see such a reaction to the positive report, since the data turned out to be better than expected and the US Federal Reserve will be able to continue to tighten monetary policy to fight inflation. The dollar index could continue to fall against the backdrop of weak data on industrial production and the index of business activity in the service sector. The data turned out to be lower than the predicted values.
At the time of writing, Bitcoin is trading at $16,935. As the S&P 500 closed higher, Bitcoin had a window to break through the $17,000 resistance. marking time raises doubts about continued growth.
On the daily timeframe, the dollar index formed a bearish engulfing candlestick formation. I think that the data is bad for bitcoin and indices, so in order to continue the recovery, you need to pass the $17,500 level as quickly as possible. In this case, sellers will begin to reduce short positions in cryptocurrencies in anticipation of continued growth. And it is desirable to overcome the resistance before the speech of the head of the US Federal Reserve, J. Powell. His speech is scheduled for Tuesday at 4:00 pm Moscow time.
It is worth noting that if the weekly candle closes above $16,900, then a “bullish engulfing” will form on the weekly time frame. The formation is not bad, considering the pinbar the week before last. The key event of the new week will be the US inflation report, which is awaited by FOMC members and investors. The report will be released on Thursday (January 12) at 16:30 Moscow time. Inflation is expected to fall to 6.5% from 7.1%. Maybe because of Powell we're standing.