Bitcoin Bulls Attempt to Retake Control Near Key Support Ahead of Key NFP Report

• Bitcoin teeters on key support as traders brace for pivotal U.S. jobs data.
• A volatile week saw Bitcoin slide 10%, testing the boundaries of its consolidation zone.
• Will today’s Nonfarm Payroll report spark a rebound or deepen the correction?
• Kick off the new year with a portfolio built for volatility - subscribe now during our New Year’s Sale and get up to 50% off on InvestingPro!

Bitcoin faces a pivotal moment as it clings to a critical support level, with traders eagerly awaiting the U.S. nonfarm payrolls data. After a volatile week marked by a 10% slide, all eyes are on whether the upcoming jobs report could tip the scales for the world’s largest cryptocurrency.

The week began on a hopeful note for Bitcoin, breaking briefly out of its consolidation zone. However, this optimism faded as profit-taking and bearish momentum drove prices down from $102,600 to $91,250. By Thursday, the crypto tested the lower boundary of its consolidation zone, leaving market participants wondering if this support will hold.

A Promising Start Meets Sudden Headwinds

Bitcoin entered the year with strong upward momentum, buoyed by the $92,800 level that had served as a sturdy base in prior consolidations. Early in the week, a breakout pushed prices to $98,740, but sellers stepped in near the $100,000 psychological barrier. Profit-taking intensified, further weighed down by reports of rapid outflows from spot Bitcoin ETFs.

Adding to the pressure, the U.S. Department of Justice announced plans to liquidate $6.5 billion in Bitcoin seized from Silk Road. This news came against the backdrop of speculation about Donald Trump’s potential return to office. Trump had previously championed Bitcoin-friendly policies, including creating a U.S. Bitcoin reserve. The prospect of a large Bitcoin sale before his potential presidency spooked the market, accelerating the decline.

Macro Forces Compound the Downturn

Macroeconomic factors further fueled Bitcoin’s sell-off. Tuesday’s stronger-than-expected JOLTS report reignited inflation concerns, raising doubts about the Federal Reserve’s willingness to cut rates aggressively. Midweek brought mixed signals: weaker private-sector employment data provided some balance, but hawkish comments from Fed officials on Thursday, coupled with a strengthening U.S. dollar, maintained downward pressure on Bitcoin.

All Eyes on Jobs Data

As the dollar gains traction, Bitcoin struggles to recover from its support near $92,800. Today’s nonfarm payrolls data and unemployment rate report will be pivotal. A robust jobs report could cement the Fed’s hawkish stance, boosting the dollar and pressuring risk assets like Bitcoin. On the flip side, weaker data could give it the breathing room it needs for a rebound.

Technical Outlook: Key Levels in Play

Bitcoin showed signs of recovery in early trading, attracting buyers at the $92,800 support. To sustain this momentum, BTC must break above short-term resistance levels at $95,800 and $96,500.

Bitcoin Price Chart

Success here could set the stage for a test of $98,740, with a weekly close above this level signaling another run at the $100,000 mark. The ultimate bullish target remains $108,200.

However, failure to hold $92,800 could spell trouble. A break below this support risks a slide to $88,000, coinciding with the 3-month EMA. A further drop could target the Fib 0.618 level at $83,300, deepening the correction and shaking market confidence.

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