Bitcoin holds above $16,850 as positive economic data points to further interest rate hikes
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(Kitco News) - The range-bound trading witnessed in the crypto market over the past three weeks continued on Thursday after the latest economic data showed private payrolls rose more than expected last month and weekly jobless claims fell to a three-month low. Tightness in the labor market persists, which could lead the Federal Reserve to push interest rates higher.
Stocks were hit hard following the data release and were unable to recover in the afternoon session, resulting in a negative close for the S&P, Dow and Nasdaq, which finished the day down 1.16%, 1.02%, and 1.47%, respectively.
Data from TradingView shows that Bitcoin's (BTC) price briefly dipped to a daily low of $16,752 following the data release, but bulls managed to bid it back above support at $16,850 to leave its price relatively unchanged on the 24-hour chart.
BTC/USD 4-hour chart. Source: TradingView
According to Kitco senior technical analyst Jim Wyckoff, the morning pullback was considered “a mild corrective pullback from recent gains,” and bulls have managed to gain some momentum this week despite the sideways and choppy trading.
As for now, “traders are waiting for a spark to ignite more volatile price action,” Wyckoff said.
Additional insight was provided by Marcus Sotiriou, Market Analyst at the digital asset broker GlobalBlock, who highlighted that the range-bound trading between $16,200 and $17,100 has caused the Bollinger Bands on the Bitcoin chart to tighten.
“Tight Bollinger Bands show how volatility has dampened significantly,” Sotiriou said. “Historically, when Bollinger Bands become constricted it results in a big move for price. The last time the Bollinger Bands were this tight was July 2020, which preceded a 5,000% move for Bitcoin to the upside. This has led many to believe that a big move is coming soon.”
Numerous analysts on Twitter also noticed the Bollinger Band development on the Bitcoin chart including pattern analyst Trader Tardigrade, who posted the following tweet noting that similar developments in the past have led to bullish rallies for the top crypto.
Bollinger bands width percentile (BBWP) bullish Crossover is happening on M2 #Bitcoin chart.— Trader Tardigrade (@TATrader_Alan) January 5, 2023
This crossover brought $BTC decent bullish RALLIES in history for twice.#BTC #Cryptos pic.twitter.com/CsoFaymO3Q
Not all were in agreement that a bullish move is approaching, however, as many noted that Bollinger Bands are more predictive of impending volatility, and there is a good chance that BTCs price could move to the downside rather than up.
A mixed day in the altcoin market
It was a mixed day in the altcoin market as there was a pretty even split in terms of gainers and losers in the top 200, with several tokens recording double-digit gains while Huobi Token (HT) and XYO (XYO) recorded double-digit losses of 10.38% and 11.59%, respectively.
Daily cryptocurrency market performance. Source: Coin360
Bone ShibaSwap (BONE) recorded the biggest gain on the day with a 21.27% move higher while Nervos Network (CKB) saw its price increase by 13.7% and Nano (XNO) gained 10.29%.
The overall cryptocurrency market cap now stands at $820 billion, and Bitcoin’s dominance rate is 39.6%.