Analysts seize opportunity as Bitcoin shortterm goals reached amidst recession concerns
A wave of economic reports released on Friday has set off alarm bells that the United States economy is teetering on the edge of a recession. In response to this macroeconomic climate, Bitcoin’s price has taken a hit, but analysts see a silver lining.
According to the Bureau of Labor Statistics, the country’s unemployment rate rose to 4.3% in July from 4.1% in June. Furthermore, non-farm payroll employment only saw a growth of 114,000 jobs, falling significantly short of the anticipated 175,000 new jobs. These figures have fueled growing concerns that a recession, which some economists have long predicted, may now be imminent.
The stock market swiftly and negatively reacted to the news, with the Nasdaq falling by nearly 2.5% and the S&P 500 and Dow both dropping close to 2%. In the cryptocurrency market, Bitcoin’s price briefly surged to $65,400 before plummeting to around $62,350. Almost all major cryptocurrencies experienced significant declines.
The volatility in the crypto market mirrored the bearish sentiment in the US stock market. The Nasdaq and S&P 500 continued to suffer, with the latter down 6% from its recent all-time high. The seven tech giants, known as the “Magnificent 7,” saw a collective market value swing of over $3 trillion in the past three weeks. The negative economic data and heightened recession fears also had an impact on investors in Europe and Asia, compounding global market uncertainties.
Despite the current panic, some analysts see this as an opportunity for Bitcoin. The potential for a weaker US dollar and Federal Reserve interest rate cuts could give a boost to the cryptocurrency. Analyst Stock Money Lizard pointed out that Bitcoin has reached the critical support level of $61,800, which has historically been a strong reversal point. A daily or weekly close above this level could trigger a short-term bullish reversal, with a target range of $66,000 to $69,885.
If this support fails, the next downside targets are $56,800 and $51,740, in line with Fibonacci extension levels. The Relative Strength Index (RSI) is near the oversold region, indicating a potential rebound if buying pressure increases.
Similarly, analyst CryptoNueco highlighted that Bitcoin has reached the $60.8k level, touching range lows, and retracing the liquidity pocket (LP). With short liquidations expected in lower time frames, an upward move is likely, presenting a trading opportunity.
Analysts recommend keeping an eye out for a rebound, as this could lead to a near-term recovery despite broader economic concerns. The next significant target is $71,600 if Bitcoin remains above $60,800.
In the past 24 hours, Bitcoin has seen a 5% decline and is currently trading at $62,070. The recent economic reports paint a grim picture for the US economy, with rising unemployment and lackluster job growth fueling recession fears. This has had a significant impact on both the stock and crypto markets, with Bitcoin experiencing a sharp decline.
However, this current environment may present a unique opportunity for Bitcoin to break away from equities and benefit from a weaker US dollar and potential Fed rate cuts. Analysts suggest closely monitoring critical support levels and market indicators to effectively navigate these volatile times.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative, and your capital is at risk.
