Bitcoin (BTC) fell to a three-week low on March 8 as stronger-than-expected jobs data from the United States dampened risk assets.
BTC/USD 1-Day Candlestick Chart (Bitstamp). Source: TradingView
Jobs stats boost Fed hawks, BTC price declines
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD plummeting to $21,858 on Bitstamp.
At the time of writing, the pair was attempting to hold $22,000 as support with traders’ downside targets at $21,300 still a long way off.
“Bitcoin is not showing the strength I originally wanted to see (slight upside yesterday),” summarized Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight.
“In this case we are looking for some more downside momentum towards a break of the lows at $21.2k before a bounce occurs. If we want $30,000, we need to flip $23,000.” Annotated BTC/USD chart. Source: Michael van de Poppe/Twitter
Fellow trader Daan Crypto Trades, meanwhile, argued that the volatility was due to movements in the bitcoin futures markets.
“Massive bid depth for the Binance futures pair. Combined with quite a surge in open interest,” he revealed that day.
“Remember that walls can be treacherous where they can be drawn at any time. It feels like a bigger movement is coming, regardless of direction.”
Macro events have provided mixed results when it comes to moving crypto markets.
An appearance by Federal Reserve Chairman Jerome Powell before the US Congress the day before drew no reaction, but the day’s jobs data dampened sentiment.
“The expectations were for 197,000 employees. The actual figure is 242,000, which is more positive than expected,” Van de Poppe wrote in part of his comments on non-farm payrolls gains.
“Not great for risk-takers as we just heard Powell plans to hike rates further in 2023.”
Such “hot” payrolls numbers have traditionally unsettled risk assets as they imply the Fed has more leeway to keep financial conditions tight for longer.
Dollar breaks two 3-month highs
Estimates of how far the Fed would hike at its next Federal Open Market Committee (FOMC) meeting on March 22 showed increasing uncertainty about slowing inflation.
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Instead of February’s 25 basis points, the market now favors a larger rate hike of 50 basis points, according to data from CME Group’s FedWatch tool.
Fed target rate probability chart. Source: CME Group
The US Dollar Index (DXY) also held a potential unwelcome surprise for Bitcoin bulls.
After a strong session on March 7, the index consolidated the day after hitting 105.88 – its highest level since December 1, 2022.
“Watch the DXY…there is a near perfect setup for a negative divergent higher high above 106, then at least a major pullback, or the dip below 100 has begun,” reacted investor David Brady.
US Dollar Index (DXY) 1-day candlestick chart. Source: TradingView
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