Bitcoin Price Key Highlights
- Bitcoin price was previously trending lower on its longer-term charts, moving below a descending trend line on its 4-hour time frame.
- Price just broke past the neckline after the U.S. printed a weaker than expected jobs report for August, triggering dollar weakness.
- This signals that the downtrend might be over and that bitcoin could be in for a strong uptrend.
Bitcoin price seems ready for a reversal since bulls were able to push past the long-term descending trend line and technical indicators are turning.
Technical Indicators Signals
The 100 SMA is starting to cross above the longer-term 200 SMA on this time frame, indicating that bullish pressure is building up. However, if the short-term moving average fails to complete this upward crossover, bears could still take control of bitcoin price action.
Stochastic is already indicating overbought conditions, which means that buyers are feeling exhausted from the climb, but the oscillator hasn’t turned lower yet. This suggests that there may be a bit of bullish momentum left enough to take bitcoin price a tad higher, possibly until the next area of interest at $630.
If profit-taking ensues, bitcoin could retreat to the broken trend line and moving averages, which could hold as support moving forward.
Market Events
Last Friday, data from the U.S. economy came in weaker than expected, leading market watchers to rethink the odds of Fed tightening in September or December. The NFP report showed that only 151K jobs were added in August, lower than the projected 180K figure and not enough to bring the jobless rate down from 4.9% to 4.8% as expected. Meanwhile, the July reading was upgraded from 255K to 275K, still a healthy sign for the jobs market.
U.S. banks are closed for the Labor Holiday today, which suggests that liquidity will be light and that any major updates could cause a more volatile reaction in the markets. Traders are also likely to position ahead of top-tier central bank announcements in the next few days so risk adjustments could be necessary for any bitcoin trades.
Charts from SimpleFX