Bitcoin Turns Bearish Short-Term. Deeper Correction Ahead?
BTC/USD Approaches Support. The NFP May Decide Whether It’s a Bounce or a Break
After printing a fresh All-Time High (ATH) at $112,000, Bitcoin started a correction that took it as low as $100,400 but some losses were erased and is currently changing hands at $102,900. Bullish momentum has waned, volatility is low and there seems to be little buying interest. However, this may change today as markets are eyeing the always-important U.S. Non-Farm Payrolls Report.
According to the forecast, around 130K new jobs were created in May, down from April’s 177K. A slowdown in job creation could cause the Fed to cut rates sooner than expected, which in turn may trigger a Bitcoin rally. A lower rate basically means that money is cheaper because banks lend at lower costs (interest) and investors are more eager to borrow. If there’s more money going around, this favors investments in riskier assets such as crypto. It is widely known as a “risk-on” period. On the other hand, a higher interest rate usually means fewer loans and reduced interest in risky assets.
Young Whales Enter the Scene
Alongside the interest rate, another key role is played by whale activity. Whales are individuals or entities that are holding large amounts of cryptocurrency and usually, a rally is preceded by whale accumulation.
According to CryptoQuant, between March 1 and June 4, there has been a massive accumulation of Bitcoin by new whales. New or “young” whales are wallets that own more than 1,000 BTC and were created less than 6 months ago. The number of BTC coins owned by these whales grew from 500,000 to over 1 million during the mentioned period. This type of behavior indicates that large investors (aka “smart money”) are expecting Bitcoin to move up. Are they right?
Chart Analysis – BTC/USD
Bitcoin broke the minor support at $106,800 and then re-tested the level from below, resulting in a rejection and a consequent move lower. Currently, it is trading below a bearish trend line, which will be the first barrier in front of rising prices. If BTC bulls manage to break this diagonal resistance, the move may get additional traction, with more buyers joining in.
The support at $102,600 is not clearly broken and it coincides with the lower Bollinger Band. If we see a daily close above $102,600, the price may be headed higher but let’s not forget that the market is on “thin ice” considering the tariff situation and its potential resolution. This matter is important for both crypto and traditional markets and can outshine the technical aspect. Also, the Non-Farm Payrolls report is still due for release later in the day and it can have a strong impact.
