- Bitcoin has started June on a positive note.
- Lower-than-expected labor market data fueled rate-cut speculation, boosting Bitcoin.
- In case of a weak NFP report today, Bitcoin could break out towards new highs.
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Bitcoin defied bearish predictions in May and began June with a bullish surge. This upswing can be attributed to recent US economic data.
Lower-than-anticipated labor market figures fueled speculation that the US economy is cooling, potentially paving the way for a Federal Reserve interest rate cut in September.
Anticipating a weakening US dollar, institutions have been increasing their allocation of risky assets, including Bitcoin. This trend is reflected in the high demand for spot Bitcoin ETF products throughout the week.
However, a key indicator remains elusive. Despite 19 consecutive days of positive inflows into Bitcoin ETFs, the price remains trapped within the $67,000-$71,000 range.
While Bitcoin ETFs have been a significant driver of price increases, other factors like spot and futures trading, options contracts, and long-term holders also play a role.
Notably, recent data reveals a decline in the cryptocurrency share held by long-term investors. This could suggest that economic and geopolitical uncertainties are prompting some savers to reduce their exposure to risky assets.
However, a potential turning point lies ahead. If Bitcoin can establish stability above $71,350 (where a large sell wall formed post-record high), the reduction in selling pressure from positive ETF activity could propel it toward new highs.
Furthermore, Bitcoin's halving event (where its supply is cut in half) combined with new and growing demand avenues reinforces optimistic forecasts for the next year.
Bitcoin Above $71K Ahead of US Jobs Data
Bitcoin is stuck in a three-day holding pattern near $71,350, with a wall of sellers preventing any significant price movement. This pause seems to be a waiting game before today's crucial US nonfarm payrolls data.
Why is this data important? Strong employment figures could cool talk of a slowing economy, reducing pressure on the Fed to cut interest rates. This, in turn, could strengthen the US dollar and weaken Bitcoin.
However, a weak jobs report could reignite expectations of a rate cut, potentially weakening the dollar and boosting Bitcoin. A break above the current resistance at $71,000 could be the catalyst for a surge towards $77,500, based on recent price patterns.
Short-term outlook: If the sideways trend continues without a breakdown, the $77,500-$83,200 range remains a potential target zone for a bullish breakout.
Before a potential rally, a pullback to $68,500 is possible. This area holds significant support, with the 21-day EMA and a short-term uptrend line acting as a buffer.
A test and subsequent rebound from this support would strengthen the case for a move towards the target zone.
However, a daily close below $68,500 indicates a wider trading range could emerge, potentially revisiting the $64,500-$65,000 zone. Further weakness could bring the $61,000 support into play.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple points of view and is highly risky and therefore, any investment decision and the associated risk remains with the investor.