The catalyst for recent market fluctuations was Friday’s employment report, which painted a bleak picture for the economy. According to the Bureau of Labor Statistics, only 29,000 jobs were created in September, falling significantly short of economists’ predictions. The unemployment rate climbed to 4.2%.
Revisions to previous months only added to the negative sentiment. July’s figures were adjusted from a gain of 21,000 jobs to a loss of 10,000, and August’s count was revised down from 162,000 to 133,000. Annual wage growth also decelerated to 3.0%.
This scenario presents a paradox: while the news is detrimental for workers, it may be seen as favorable for risk assets in this unusual economic cycle.
The Federal Reserve voted unanimously to increase interest rates by 25 basis points to a range of 3.75%-4.00% on September 16. A week prior, traders had considered a potential rate hike in October to be a 64% likelihood; however, following Friday’s report, those odds plummeted to around 16%-22% based on various snapshots.
This outcome stands in stark contrast to last month’s scenario when an unexpectedly strong August employment report led to a more than 2% drop in Bitcoin, bringing it close to $79,300 as expectations for interest rate hikes intensified. Currently, Bitcoin is trading approximately 8% higher than that figure.
The stock market also reacted positively. The S&P 500 ended Friday at 7,722.72, marking a 0.73% increase, while the Nasdaq rose by 1.19% to 27,190.86, and the Dow climbed 0.49% to 51,176.96. Nvidia reached a new record high, and stock futures showed positive momentum going into Sunday night.
In the altcoin sector, prices are varied. Ethereum is trading at $2,711, up 0.59%, while XRP stands at $1.51, gaining 0.81%. Solana has seen a decline of 0.91%, currently priced at $120.31. Notably, while all top 10 altcoins have shown positive movement, only Hyperliquid has surged with a notable 3.68% increase for the day, reaching $93.17 and climbing 6% over the week.
Funds from ETFs are also holding strong. Recent reports indicate that U.S. spot Bitcoin ETFs experienced $189.84 million in net inflows, bringing total net assets to $101.1 billion, as per data from Decrypt.
Bitcoin Price: Facing Resistance but Gaining Momentum
The price chart reveals some indecision. On the daily chart, the $87,354 peak is now a critical level to surpass.
Momentum indicators signal strength. The Relative Strength Index (RSI), which compares recent gains to losses on a scale from 0 to 100 (with readings over 70 indicating overbought conditions), stands at 64.7—indicative of strong momentum, but not excessively overbought. The Average Directional Index (ADX), which assesses trend strength and considers readings above 25 to signify strong trends, is positioned at 43.4.
Exponential moving averages (EMAs), which calculate the mean price over a specific duration while giving more weight to recent prices, are also significant. A golden cross occurs when a faster EMA crosses above a slower EMA. The chart reveals that the 50-day EMA is currently above the 200-day EMA, marking a classic golden cross that occurred in mid-September as Bitcoin achieved its second-best monthly performance ever.
More impressively, the 100-day EMA has also recently climbed above the 200-day EMA, as illustrated in the accompanying chart, where the 100-day EMA is represented by the dotted white line.
What makes the 100/200 EMA crossover even more bullish? It’s considerably more challenging to manipulate. A rapid bounce over a two-month span might push the 50-day EMA above the 200-day EMA temporarily. However, for the 100-day EMA to rise above the 200-day EMA, Bitcoin’s price must maintain a high level for an extended period, suggesting a resurgence in its medium-term trend following the sub-$60,000 levels seen in July.
Together, these two crosses indicate that both short-term and medium-term averages now exceed the long-term average, reinforcing the same narrative. The caveat is that EMAs are lagging indicators, confirming movements post-factum rather than predicting future trends.
On Myriad, a trading platform developed by Decrypt‘s parent company Dastan, traders are optimistic about a short-term price increase. In the market for October highs, a rise to $87,500 has an 80% probability, $90,000 at 59%, $95,000 at 25%, and $100,000 at 12%.
This week’s economic calendar may be short but is filled with significant events. The Federal Reserve will release the minutes from its September meeting on Wednesday, October 7, at 2:00 p.m. ET, followed by the BLS publishing the September Consumer Price Index on October 14. The next Federal Reserve policy meeting is scheduled for October 27-28, with a press conference on October 28 at 2:30 p.m. ET.
Disclaimer
The opinions expressed by the author are solely for informational purposes and should not be interpreted as financial or investment advice.