The resilience of the US labor market is slowing the bullish momentum of the world's most popular cryptocurrency.
The price of bitcoin remains in consolidation around $90,000, following the release of labor data revealing a decline in applications for unemployment benefits in the United States. This figure, which stood at 217,000 applications, was lower than the 223,000 expected and also fell from the 221,000 of the previous week. Continuing applications also showed a decline, reaching 1,873,000, below expectations and the previous figure.
Bitcoin consolidates at $90K after positive US jobs data limits interest rate cuts. / TradingView
A robust labor market
The data on unemployment benefits applications indicate that the US labor market remains resilient. The upward trend in applications, which began in early 2024, seems to be slowing down. A strong labor market limits the US Federal Reserve's ability to make interest rate cuts, which in turn strengthens the dollar. This Thursday, bitcoin experienced a slight loss of 1.10%, trading at $89,382.71 at the time of this report.
Dollar hits new highs
The dollar index (DXY) hit a new high of 107.06 points, the highest level since October 2023. This strong recovery of the dollar could be slowing down the recent bullish momentum of bitcoin, which had shown significant growth in recent weeks. Investors are betting that the Federal Reserve could have limits on its monetary policy, which could restrict interest rate cuts after December, due to fears of inflationary outbreaks.
Inflation and market expectations
The latest inflation data showed an increase, closing at 2.6%, which represents the first increase in several months. In addition, core inflation year-on-year stood at 2.4%, beating expectations of 2.3% and the previous figure of 1.9%. Even though 75.4% of federal funds futures market participants anticipate a 25 basis point cut in December, 58% believe rates will remain at 4.50% in January 2025. This uncertainty could be strengthening the dollar, which could be negative for risk assets such as cryptocurrencies.
Bitcoin technical analysis
In the short term, bitcoin consolidated near the $90,000 area, where it found resistance. The recent price escalation was halted at a time when the market is showing extreme greed, with an index of 86 points. However, bitcoin maintains a clear upward trend, having broken a sideways quote since March, where the ceiling was at $72,000. The short, medium and long-term moving averages are aligned upwards, confirming a bull market. However, the current price is in an overbought zone, with an RSI of 80.25 points, suggesting a possible correction needed to continue its upward trajectory. The first support is located at the EMA 25, which is at $75,900.
Despite the recent consolidation, Bitcoin has returned extraordinary gains of 151.42% over the past 12 months. Investors should keep an eye on upcoming labor market moves and Federal Reserve decisions, as these factors will influence the future direction of the cryptocurrency.
Disclaimer: This news is for informational purposes only and should not be considered financial advice. Investing in cryptocurrencies carries risks.
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