Bitcoin hits $40K ahead of crucial US jobs report

  • Bitcoin price closes above $40,000 again
  • BTC/USD exchange rate stays supported over the 20-day and 200-day EMA
  • The top cryptocurrency’s price spike comes amidst an optimistic US jobs outlook for July

JAIPUR (Coinchapter.com) – Bitcoin moved north of $41,000 Friday as investors waited for July’s US jobs report.

A Dow Jones poll noted that economists expect the US economy to add about 845,000 jobs in July. But predictions are all over the place due to the Covid-19’s delta variant playing spoilsport. The gamut of forecasts ranges from 350,000 to 1.2 million. Wilmington Trust economists have chosen to put their money on the former number, with Jefferies economists rooting for the latter. And both have their reasons.

Lower predictions are due to slower growth in high-frequency data, opines Wilmington Trust chief economist Luke Tilley.

“We think the run rate right now is about 500,000. Last month seems a little bit overcooked,”

said Tilley.

Even if the July jobs report does come in strong, the delta variant factor will be largely absent from the calculations.

“Whatever the number is, it’s going to be heavily caveated by the fact that during the survey week, the delta variant concerns weren’t as pronounced as they are right now or as they will be during the August survey period,” 

noted BMO fixed income strategist Ben Jeffery.

That, in turn, adds a whole new dose of uncertainty in labor market growth, even with unemployment rates expected to dip below 5.9%.

Related: Bitcoin week ahead Ep10: Expect a calmer week after the NFP-backed rally.

Bitcoin Back Above $40,000

Despite more robust predictions, weak sentiment for the July jobs report dashed the Fed’s plans to taper its monthly $120 billion bond purchase. Risk-on assets like stocks and Bitcoin inched up higher as a result.

The BTC/USD exchange rate, in particular, notched up 10% from the $37,222 low recorded in Thursday’s noon session to $41,484.

As usual, profit-takers sold the top. The area above $40,700 served as a cue to traders to secure their short-term profits. But bulls still managed to keep the top cryptocurrency hovering over $40,000.

Bitcoin appears to be holding firm above the 20-day, 200-day, and 21-week exponential moving average (EMA) waves. According to analysts, this is a bullish indication.

“#BTC is now in the process of retesting its 21-Week EMA as support. The 21-week EMA is a time-tested Bull Market indicator.”

said Twitter-based crypto trader and analyst, Rekt Capital.

However, bulls would need to reclaim $42,500 as support for a run towards $48,000-50,000. Otherwise, the risks of falling towards $35,000, or the 200-day simple moving average (200-day SMA) wave would remain intact.

BTC/USD needs to close above $42,500 for the next leg of bullish advance.
BTC/USD needs to close above $42,500 for the next leg of bullish advance. Source: BTCUSD on TradingView.com

Bullish Fundamentals

On the fundamental front, Bitcoin comes out as bullish.

According to Glassnode, the number of new Bitcoin addresses is still far below the count during the fall from the 2017 high of $20,000. Moreover, data from the on-chain metrics provider shows that new address growth remained lower even during the rally to $65,000 earlier in April this year.

Related: Bitcoin HODLing Addresses Have Grown 2X Since Last Year – What Does This Mean?

Bitcoin new address growth since 2017
Bitcoin new address growth since 2017, Source: Glassnode

The trend suggests that Bitcoin still has to experience a significant amount of capital infusion. And the bull market is yet to begin earnestly.

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