Breaking: Bitcoin Turns Volatile As US Initial Jobless Claims Drop To 196K

Bitcoin struggled with a bumpy ride on Thursday as new U.S. labor-market data indicated that weekly jobless claims dropped massively. This raised questions on how the report might affect the Fed’s interest rate trajectory after the latest rate hike.

Ad

Ad

US Initial Jobless Claims Plunge Massively

U.S. initial jobless claims fell 10,000 to 196,000 in the week ending September 12, according to Department of Labor data. This figure is much below the forecast of 207,000 and lower than the previous week’s 206,000. Also, the 4-week moving average dropped to 203,250.

Lower jobless claims are hawkish for the Fed as it suggests a healthier labor market and less firings. That matters because the Fed has less reason to worry that high interest rates are weakening employment, while it can keep rates higher or hike again to fight inflation. The Labor Department also calls initial claims a leading economic indicator (with a warning that the weekly numbers can be volatile).

That relationship has become extremely critical after the FOMC decision on Wednesday. The Fed’s decision to hike its benchmark interest rate by 25 basis points to 3.75%-4.00% was driven by robust economic growth, strong domestic spending, and high inflation. Job growth was also at a level consistent with the size of the labor force, the central bank added.

The Fed’s latest forecasts call for yet another increase this year, with the median year-end federal funds rate at 4.1%. The robust labour data would further support policymakers’ expectations that inflation may not be brought down promptly enough to make them feel comfortable with easing policy. Hence, such hawkish US jobs data could weigh on risk assets like Bitcoin and overall crypto market.

Goldman Sachs has already changed its tune. The bank has changed its forecast for another 25-basis-point rate hike from one, as previously predicted, for this year. The update from Goldman was issued after policymakers gave mixed signals about whether more tightening might be needed to put measures in place to bring the inflation rate back within the Fed’s 2% target zone.

Ad

Ad

What’s Next For Bitcoin?

Amid this backdrop, Bitcoin first rallied 1.25% to $76,800 after the release of the jobs figures. The BTC price then turned back hovering around $76,051 at press time, representing a 1% decrease from an hour ago.

Technical analysts are already on the lookout for resistance levels. Ahead of the decline, analyst Ted Pillows wrote on X, “$BTC is just one god candle away from hitting a higher high.”

His chart collage revealed that Bitcoin, Ethereum and Solana are testing higher-highs. Bitcoin’s important higher-high range was at approximately $82,000, with the Ethereum and Solana charts displaying higher-highs as well.

In the meantime, Michaël van de Poppe pointed to some resistance at the current price range of Bitcoin. According to his chart, BTC has bounced off of the $75,584 level, but was now approaching a support/resistance zone around the $77,500 level, followed by a larger resistance zone between $80,500 and $81,200.

Poppe concluded, “Bitcoin facing resistance here. If you’d want to see some momentum, you’d need to break through this resistance and then we’re of towards the highs.”