Bitcoin (BTC) Falls Below $44,000 as Strong US Jobs Report and Spot ETF Approvals Awaited
Bitcoin (BTC) has dropped below the $44,000 level and is poised to test $43,000 again following a better-than-expected US jobs report. Market participants are also keeping an eye on the potential approval of spot Bitcoin ETFs in the US.
US Jobs Report Shows Positive Data
The latest US jobs report revealed that companies added more employees than anticipated in December. The unemployment rate remained steady at 3.7% instead of rising to 3.8%, and wages grew faster than expected.
No Impact on Broader Market
Despite the positive data, the robust jobs report did not have an impact on the broader market. Major US equity indices stabilized after a challenging start to the year, while US government bond yields and the US Dollar Index remained unchanged.
Fed Easing Remains a Bullish Narrative for Bitcoin
The most significant takeaway from the report is that expectations for the Fed to begin cutting interest rates in March are high. This potential Fed easing is seen as a bullish narrative for Bitcoin in 2024.
What’s Next for Bitcoin (BTC)?
Bitcoin is currently trading around the mid-point of its recent range, between $41,500 and $46,000. The market is expected to remain cautious and consolidative until the anticipated approval of spot Bitcoin ETFs by the US SEC before January 10th.
Long-Term Bullish Factor: Approval of Spot Bitcoin ETFs
The approval of spot Bitcoin ETFs in the US is considered a long-term bullish factor for the Bitcoin market. It signifies regulatory approval of Bitcoin as an asset and makes it easier for institutional investors to gain direct exposure to Bitcoin, unlocking potential new demand.
Possible “Sell-the-Fact” Reaction
However, there are concerns that the market may experience a “sell-the-fact” reaction if spot ETF approval is confirmed. This scenario describes traders aggressively taking profits after an anticipated bullish event, leading to a sell-off.
Bitcoin’s Bullish Trend Channel
Despite this, Bitcoin remains in a bullish trend channel. If spot ETF approval is followed by strong initial demand from investors, Bitcoin could continue its upward momentum towards the 2022 highs of around $48,000. However, a break in the current uptrend could lead to a retest of sub-$40,000 levels.
Opportunity for Dip Buyers
If Bitcoin experiences a setback below $40,000, it is likely to be short-lived and could present an excellent opportunity for dip buyers. The upcoming Bitcoin issuance rate halving in April and potential Fed interest rate cuts further support positive momentum for Bitcoin this year.
Continuing the Market Cycle
Bitcoin appears to be following its usual four-year market cycle, with a one-year bear market followed by a three-year bull run. Since bottoming out in 2022, the price has surged approximately 180%, and new all-time highs above $69,000 remain possible in 2024.
Hot Take: Bitcoin Shows Resilience Amidst Strong US Jobs Report and Anticipation of Spot ETF Approvals
Despite falling back below $44,000, Bitcoin has demonstrated resilience amidst positive US jobs data and the looming possibility of spot Bitcoin ETF approvals. The market remains cautious and awaits the potential approval by the US SEC. While approval of spot Bitcoin ETFs is considered a long-term bullish factor, there is concern about a “sell-the-fact” reaction. However, Bitcoin’s current trend channel suggests further upward momentum, with a possibility of reaching the 2022 highs. Any setback to sub-$40,000 levels is expected to be temporary and could attract dip buyers. With the upcoming Bitcoin issuance rate halving and potential Fed interest rate cuts, Bitcoin is poised to continue its market cycle and potentially reach new all-time highs in 2024.
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