Bitcoin had a strong rally after Fed Chair Powell suggested a more lenient approach, which raised the chances of a rate cut in September to 84%. However, this rally didn’t last long, as Bitcoin’s price dropped over the next few days, likely due to technical factors.

US Non-Farm Payroll Report Anticipation

Attention now turns to the upcoming US Non-Farm Payroll report, which could really impact interest rate expectations. Strong data could reduce the chances of a rate cut in September, putting short-term pressure on Bitcoin. On the flip side, weak data might increase bets on a more dovish monetary policy, potentially helping the cryptocurrency. Currently, Bitcoin is trading below the important support level of $111,900. Sellers aim to push the price down to $100,000, while buyers hope for a rise above $111,900 to trigger a rally towards $123,000. On shorter timeframes, downward and upward trendlines are visible, with sellers focusing on bearish trends and buyers pursuing upward momentum. Upcoming reports like Jobless Claims and the PCE price index will be crucial for market direction. These will help decide if the market will support an upward or downward trend. Bitcoin’s recent drop is surprising, especially after the dovish signals from the Federal Reserve on August 22nd. Even with an 84% probability for a rate cut seen on CME’s FedWatch Tool, the price couldn’t hold its gains and broke key support. This suggests that the market is currently prioritizing factors beyond just monetary policy.

Bitcoin Futures and Market Trends

The price is now below the key $111,900 level, which is acting as resistance. We have observed a rise in put option volume on exchanges like Deribit, with significant interest in contracts expiring in September at the $100,000 strike price. This indicates that traders are hedging or positioning themselves for a potential drop to that psychological support level. For those who expect a further decline, the downward trendline on the 4-hour chart is an important area to watch for signs of weakness. A possible strategy involves taking short positions with a defined risk set just above the $111,900 resistance. This selling pressure is supported by data showing a 12% decrease in Bitcoin futures open interest over the past week, indicating that some long positions have been closed. On the other hand, bullish traders need to see a strong break and consistent trading above $111,900 to regain market control. A move like this could lead to a short squeeze and open the way to the $123,000 target. Buyers might consider the minor upward trendline on the 1-hour chart as a potential entry point for a short-term bounce. All eyes are now on the Non-Farm Payrolls report set for next week, on September 5th. Given mixed economic signals earlier this summer, this jobs report will play a key role in influencing the Fed’s next decision. A strong report could lower the likelihood of a September cut and put pressure on Bitcoin, while weak data would likely support dovish bets. Before that key report, we’ll receive the PCE price index this Friday, the Fed’s preferred inflation measure. We’ll also see the latest jobless claims figures tomorrow. These updates will help refine expectations and could lead to short-term volatility ahead of the important jobs data next week. Create your live VT Markets account and start trading now.

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