Bitcoin faced some pressure after a weaker-than-expected Non-Farm Payrolls (NFP) report, which raised concerns about economic growth. However, comments from the Fed’s Williams helped Bitcoin bounce back by suggesting an open approach to the upcoming September meeting. The market was ready for a stronger NFP report, so the results surprised many. Currently, the expectation is for 58 basis points of interest rate cuts by the end of the year, up from the previous 35 basis points, following the report. The potential for easing and low inflation numbers from ISM Manufacturing and UMich reports could provide future support for Bitcoin. Upcoming ISM Services PMI and Jobless Claims data might give Bitcoin an extra boost. Together, these factors could lead markets to believe that Fed Chair Powell may allow a rate cut in September. Technical analysis shows that Bitcoin has pulled back to the major trendline around the $112,000 level, with buyers preparing for a rally. On the 4-hour chart, there is a resistance zone around $116,000, with sellers trying to push below the trendline. The 1-hour chart shows minor support around $114,000, providing some protection from further declines. Key upcoming events include the ISM Services PMI and Jobless Claims data. As of today, August 4, 2025, the market is still reacting to last week’s soft Non-Farm Payrolls report, which revealed only +155,000 jobs added. This initially worried investors about economic growth, but attention has shifted quickly. The chances of Fed rate cuts have risen significantly, giving Bitcoin some stability for now. This is evident in the futures market, where CME FedWatch data indicates an expectation of 58 basis points of cuts by year-end, a notable increase from 35 basis points before the report. This positive sentiment is backed by last month’s Core PCE inflation data, which showed a cooling trend at 2.6% year-over-year. For traders, this means that negative economic news is being viewed as good news for assets. This situation feels reminiscent of the market shift we saw in late 2023 when expectations of rate cuts led to a big rally in risk assets. We appear to be in a similar phase now, where the prospect of looser monetary policy is overshadowing immediate growth concerns. The upcoming Jackson Hole Symposium is a key event where Fed Chair Powell might hint at a September cut. From a derivatives standpoint, the major trendline at the $112,000 level is strong support. Traders might consider selling cash-secured puts or bull put spreads with strike prices below this level to earn premium. This strategy is beneficial if Bitcoin stays above this support zone in the coming weeks. Conversely, the $116,000 area represents clear resistance. A sustained break above this zone, particularly after a weak ISM Services PMI report tomorrow, could signal a good time to start long positions. Buying call options or call spreads could position traders for a potential rally toward new all-time highs. However, careful risk management is crucial. A drop below the $112,000 trendline could lead to a quick move down to $100,000. Protective puts can help hedge long positions, especially around significant data releases like jobless claims on Thursday. The market is banking on a soft economic landing, but unexpected data could change that outlook quickly.

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