Bitcoin Price Slumps Post Release Of U.S. Jobs Data, Is $35k Next?

Ambar Warrick
March 5, 2022
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Bitcoin

Bitcoin price dropped 8% to $38,000, erasing much of its recent rally.  The latest sell-off was triggered by data showing strength in the U.S. jobs market, which furthers the case for a Federal Reserve rate hike this month.

Fed hikes paint bearish picture for Bitcoin

Although Bitcoin was already on a mild downtrend over the past few days, the currency accelerated its losses right after strong U.S. jobs data.  Employment grew at its highest pace in seven months in February, Yahoo Finance reports. The reading further ties into recent comments from Fed Chair Jerome Powell that the job market was heating up, and that the Fed will likely hike rates by at least 25 basis points in March.

An interest rate hike will reduce liquidity in the market, curbing the amount of cash that can be invested in Bitcoin.

Bitcoin-jobs-data
Bitcoin slumps below $40k

Inflation and employment are the two main factors considered by the Fed in adjusting rates. With U.S. consumer prices at a 40-year high, a hike seems likely when the Fed meets on March 15th and 16th. Hawkish comments from Powell also dismissed recent speculation that the Russia-Ukraine conflict would make the Fed pause its plans for hiking.

Broader financial markets wilted after the data, as the prospect of Fed hikes added to uncertainty caused by the Russia-Ukraine conflict. Concerns over Russia capturing Europe’s largest nuclear reactor in Ukraine had also rattled sentiment.

Despite decoupling from the stock market for nearly a week, Bitcoin sank in line with U.S. equities on Friday. The Bitcoin fear and greed index sank back into extreme fear after nearly a week in neutral.

Is $35k next for Bitcoin price?

Traders were now looking at $35,000 as the next support level. A breach would put Bitcoin exactly where it was about two weeks ago, when heightened fears of the Russia-Ukraine conflict had spurred a risk-off sentiment. While  the token had since then rallied off a one-month low, going as far as $44,000, a pullback in trading by major whale accounts had stalled gains.

$44,000 was also the last ceiling faced by Bitcoin in February. The currency is trading down 18% this year.

We’re now back in the $35,000 – $39,000 territory and not a lot of major good news to kick start a rally. So we might be going back to $35,000 support line.

-crypto investor @StevenAitchison says.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
With more than five years of experience covering global financial markets, Ambar intends to leverage this knowledge towards the rapidly expanding world of crypto and DeFi. His interest lies chiefly in finding how geopolitical developments can impact crypto markets, and what that could mean for your bitcoin holdings. When he isn't trawling through the web for the latest breaking news, you can find him playing videogames or watching Seinfeld reruns. You can reach him at [email protected]
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.