Key Takeaways
Will BTC bounce back this week?
It depends on the jobs report. A weak report could increase the chances of a Fed rate cut, as well as sentiment, and trigger a relief rally. But a strong labor market could deepen the sell-off.
What is the analyst’s view on this?
Swissblock believes BTC could stabilize, while analysts from QCP Capital and Nansen warned of a possible dip to $80,000.
Bitcoin [BTC] consolidated recent losses above $90,000, following a brief decline to $89.2,000 on November 18, ahead of the September Jobs report scheduled for November 20.
This will be the most crucial macro print of the week after being postponed due to the US government shutdown.
It will impact expectations for a Fed rate cut and, by extension, market sentiment in risky assets.
At the time of writing, the market was prices an almost 50/50 scenario, with a cautious interest rate pause or a cut of 25 basis points.
Source: CME FedWatch Tool
The upcoming data release on November 20 will provide important insights into labor market conditions and help shape expectations for the Federal Reserve’s decision at its December meeting.
For the Singapore-based crypto trading company QCP Capitalthe Jobs report will determine whether the market recovers or accelerates the current sell-off.
“Overall, conditions appear more late-cycle than recessionary, but with fiscal constraints, uneven consumption and liquidity dilution, coming data will decide whether $BTC’s decline is a shakeout or the start of a broader risk phase.”
Is BTC’s Fall Below $90,000 Inevitable?
As stated by QCP Capital analysts: Liquidity in US dollars has also thinned since late October, a view echoed by Arthur Hayes, founder of BitMEX.
Collectively, the October 10 deleveraging, macro uncertainty and the ‘liquidity crisis’ have exacerbated market disruption for risky assets, including crypto.
That said, the liquidity front is expected to recover in early December, right around the time of the Fed’s interest rate decision.
Before then, however, the BTC price could end up in the $80,000-$85,000 region, warned Nicolai Søndergaard, research analyst at Nansen. In an email statement, Søndergaard told AMBCrypto:
“Based solely on the BTC options data and assuming all else is equal, there is a non-negligible chance of a move towards the mid-$80,000s, although current levels or a recovery appear more likely.”
Meanwhile, on-chain data sets indicated that a potential stabilization and likely recovery were still on the cards.
Source: CryptoQuant
Remarkably, miner dump had reset to net buying in recent days during the extended dive. Such steps always precede a cooling-off period after a huge sell-off.
Similarly, short-term holders’ capitulation (STH) had reached $427 million per day, matching previous critical zones and medium-term lows. noted Swiss bloc.
Source: Swissblock
Put another way, on-chain data suggested the market was nearing a bottom and ready for a reversal. However, the numbers from the Jobs report and the Fed’s interest rate decision will ultimately determine the direction of the market at the end of the year.