Bitcoin News – BTC Price Correction: Is Bitcoin Ready for a Bullish Divergence?
Bitcoin News – On January 10, Bitcoin (BTC) experienced significant volatility after stronger-than-expected U.S. nonfarm payrolls (NFP) data raised concerns about future crypto capital inflows. The BTC/USD pair dropped by $1,500 following the announcement, as the robust labor market data placed pressure on risk assets, including Bitcoin.
U.S. Nonfarm Payrolls Data Pressures Bitcoin and Risk Assets
According to data from Cointelegraph Markets Pro and TradingView, Bitcoin’s price abruptly fell by $1,500 as the December NFP report exceeded expectations. This report, which reflected a stronger-than-anticipated labor market, along with unexpectedly low unemployment figures, led to broad declines in risk assets. The NFP data raised the possibility that the Federal Reserve might not cut interest rates as aggressively as previously forecasted. This outcome reduced the likelihood of liquidity flows into riskier assets such as Bitcoin and the broader cryptocurrency market.
As a result of the report, the odds of a Federal Reserve interest rate cut during its January meeting dropped significantly. According to the CME Group’s FedWatch Tool, the probability of even a modest 0.25% rate cut is now just 2.7%. Keith Alan, co-founder of the trading resource Material Indicators, stated on X (formerly Twitter), “NFP comes in HOT, the UNRATE comes in cold, which is great news for the strength of the economy, so why did BTC and the broader market dump? Simple. This points to fewer FED Rate Cuts in 2025.”
Holiday Season and New U.S. Administration’s Potential Impact on Markets
Alan further acknowledged that the holiday season likely influenced the NFP data, suggesting that increased hiring during this period could have played a role in the positive labor market figures. He also pointed out that any immediate market effects could be overshadowed soon, especially with the upcoming changes in U.S. leadership.
“Worth noting that the holiday season typically means an increase in hiring, and that had an influence on the reports,” Alan noted. He also mentioned that the market is speculating on economic conditions for the entire year, despite the impending changes with the new U.S. administration. “Also worth pointing out that the market is speculating on the entire year despite the fact that we have a new administration coming in 10 days that is going to enact policies that likely have a profound impact on the economy.”
Bitcoin Liquidity Levels and Support Zones
Amid the market’s reaction to the economic data, Bitcoin’s price faced a dip, breaking through what had been a rare period of consecutive gains. On hourly timeframes, BTC/USD had posted 14 consecutive green candles, marking a first since 2017. As the market adjusted to the news, liquidity conditions on the Binance BTC/USDT order book showed key support levels at $88,000 and $90,000.
Despite the macroeconomic dip, Bitcoin’s overall price action remained within a well-established range. Key support and resistance levels were clearly visible, and traders seemed to pay little attention to the abrupt volatility.
“Market is either up only or down only on these smaller timeframes. In the end many get chopped up,” said Daan Crypto Trades, a popular trader on X. He recommended that traders should zoom out for a better perspective, which could offer more insight into Bitcoin’s long-term trajectory.
Analysts Predict High Probability of Bitcoin Price Reversal
In contrast to the immediate bearish sentiment, some analysts remain optimistic about Bitcoin’s potential. Rekt Capital, a fellow trader and analyst, highlighted the ongoing bullish divergence on Bitcoin’s relative strength index (RSI) on the daily chart. RSI, which measures momentum, had reached its lowest levels since October 2024, but the divergence suggested a potential price reversal.
“Bitcoin is showing signs of a Bullish Divergence at Range Low support of $91,000,” Rekt Capital tweeted. This analysis was accompanied by the assertion that Bitcoin’s current 15% pullback was typical for previous bull markets, especially at this stage of price discovery.
“The timing of this retrace is in line with historical tendencies,” Rekt Capital continued, adding, “It is the first Price Discovery Correction of this cycle. As a result, it has a high probability of reversal.”
Bitcoin’s Market Outlook: Will a Reversal Occur?
While the immediate reaction to the U.S. NFP data led to a sell-off in Bitcoin and other risk assets, many traders and analysts are looking at the broader picture. Despite the impact of strong labor market data and potential changes in the Federal Reserve’s rate-cut plans, analysts like Rekt Capital argue that Bitcoin is well-positioned for a rebound due to the bullish divergence and historical trends.
The focus now shifts to whether Bitcoin can break through the support and resistance zones at $88,000 and $90,000. If BTC finds support at these levels and begins to reverse course, it could signal the start of another bullish phase, with higher highs potentially on the horizon.
Conclusion: Bitcoin’s Long-Term Outlook Remains Uncertain Amid Volatility
Bitcoin’s recent volatility, driven by U.S. macroeconomic data, has created uncertainty in the market. The market’s focus has shifted from concerns over interest rate cuts to speculation about how the upcoming political changes in the U.S. might affect the economy and financial markets.
As of now, Bitcoin’s price is still within its range-bound structure, with key support levels in place at $88,000 and $90,000, while analysts continue to monitor the potential for a reversal in the coming weeks. Traders are advised to keep a close watch on macroeconomic indicators and liquidity conditions, as these factors will likely dictate Bitcoin’s next major move.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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