A recent U.S. jobs report has sent shockwaves through financial markets, leading to a significant rise in the dollar while Bitcoin experienced a downturn, dropping below $111,000. The latest data indicated a decline in initial jobless claims by 14,000, bringing the total to 218,000, the lowest figure seen in two months. In addition, the revision of Q2 GDP growth from 3.3% to 3.8% further fueled investor sentiment, pushing the U.S. Dollar Index (DXY) to a three-week high, up by 0.3% in a single day.
This strong economic data lessens the likelihood of Federal Reserve interest rate cuts, casting a shadow over risk assets like Bitcoin. Following a 25-basis-point cut last week, discussions among Fed policymakers have become more cautious, with odds for an October cut decreasing from 92% to 85.5%, according to CME Group’s FedWatch Tool.
Market analytics from Glassnode highlight signs of exhaustion in Bitcoin, suggesting that the cryptocurrency’s bullish momentum may be waning. Notably, ETF inflows—historically crucial for absorbing Bitcoin supply—have started to decline significantly since the Federal Open Market Committee (FOMC) meeting, leading to an accelerated distribution among long-term holders. This has created a precarious balance, with Bitcoin testing key support levels around $111,000. Experts warn that a breach below this support could lead to further declines, potentially down to $105,000 or even $90,000.
Meanwhile, rising geopolitical tensions linked to the ongoing Russia-Ukraine conflict—particularly recent incidents involving Russian warplanes near Alaskan airspace—have heightened market uncertainty. Traders are increasingly gravitating toward safe-haven assets, such as gold, which further complicates Bitcoin’s ability to attract new investments. However, some analysts view these conditions as temporary.
Despite recent bearish trends, analysts like Rekt Capital maintain that the bull market for Bitcoin is not yet over. They point out that the 21-week exponential moving average (EMA) is rising and the cryptocurrency is attempting to establish higher lows, which could indicate a potential recovery. Many analysts are anticipating a typical seasonal pattern where Bitcoin experiences pullbacks before a rally around October and November.
Investor confidence in Bitcoin remains surprisingly high, with Coinbase CEO Brian Armstrong suggesting that the cryptocurrency could reach $1 million by 2030. Similarly, former BitMEX CEO Arthur Hayes has forecasted that Bitcoin could surge as high as $3.4 million by 2028, contingent upon specific policy changes from Treasury Secretary Scott Bessent that might lead to extensive money printing.
From a technical standpoint, recent price movements indicate that Bitcoin has broken out of an upward channel, facing resistance at $116,000 and testing a support zone around $112,000. Analysts currently highlight this support as a critical area; if it holds, there may be potential for a rebound toward $116,000. However, a decisive break could trigger further declines, aiming toward $108,000.
Overall, the market appears to be transitioning from overly bullish to a more cautious stance, with future movements intricately tied to how these critical support levels hold up against current pressures.
