Bitcoin clings to $22K as US dollar strength rises to December levels — What’s next?

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Bitcoin (BTC) fell to a three-week low on March 8. That’s because better-than-expected US jobs data weakened risk assets.

BTC/USD 1-day candlestick chart (Bitstamp).Source: Trading View

Jobs data boosts Fed hawks, BTC price falls

Cointelegraph Markets Pro and TradingView It showed BTC/USD fell to $21,858 on Bitstamp.

The pair was trying to hold on to $22,000 as support at the time of writing, but traders’ downside targets are still off $21,300.

“Bitcoin hasn’t shown the strength I initially wanted to see (a slight bounce occurred yesterday),” said Cointelegraph contributor Michael van de Poppe, founder of trading firm Eight. Also serves as CEO. wrap up.

“In that case, look for more downward momentum to wipe out the $21.2K low before the bounce happens.If you want $30,000, you need a $23,000 flip.”

BTC/USD annotated chart. Source: Michael van de Poppe/Twitter

Meanwhile, trading account Daan Crypto Trades claimed that the volatility was due to movements in the Bitcoin futures market.

“Very large bid depth for Binance futures pairs. Coupled with a large increase in open interest,” he said. clearly On that day.

“Be aware that walls can deceive where they can pull at you at any moment. It feels like greater movement is coming regardless of direction.”

Macro events have had mixed results when it comes to crypto market moves.

Federal Reserve Chairman Jerome Powell’s appearance in the U.S. Congress the day before sparked no reaction, but the day’s employment data soured the mood.

“We expected 197,000 employees. The actual number was 242,000, which is more positive than expected,” said Van de Poppe. I have written Some of the comments on the increase in non-farm employment that day.

“We just heard that Chairman Powell wants more rate hikes in 2023, so it’s not great for risk-on investors.”

Such “hot” jobs traditionally destabilize risk assets. This is because it suggests the Fed can afford to keep financial conditions tighter.

Dollar hits two three-month highs

Predictions about how far the Fed will hike rates at its next Federal Open Market Committee (FOMC) meeting on March 22 show growing uncertainty about lower inflation.

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The market is now favoring a bigger rate hike of 50 basis points, instead of 25 basis points in February, according to CME Group data. FedWatch Tools.

Federal Reserve Target Interest Rate Probability Chart. Source: CME Group

Similarly, the US Dollar Index (DXY) has the potential to be an unwanted surprise for Bitcoin bulls.

After a strong session on March 7th, the next day’s index correction reached 105.88 — the highest level since December 1st, 2022.

“Watch out for DXY…it has a near-perfect set-up of negative divergent highs above 106, followed by at least a major rebound or beginning to fall below 100,” said investor David Brady. said. reacted.

US Dollar Index (DXY) 1-day candlestick chart.Source: Trading View

The views, thoughts and opinions expressed herein are those of the authors only and do not necessarily reflect or represent the views or opinions of Cointelegraph.