Cryptocurrency Bitcoin Stumbles Following Payroll Surprise: Accumulated Gains Disappear, Potential for $100,000 Evaluation Awaits

In a surprising turn of events, gold has reached new all-time highs following the latest payrolls report. The precious metal seems to be getting a party invite from the Federal Reserve, while Bitcoin, on the other hand, finds itself lingering in the hallway.

The jobs market appears to be on life support, with the U.S. labor market described as rapidly deteriorating by The Kobeissi Letter. This has provided the Fed with an excuse to slash rates, as indicated by Fed Chair Jerome Powell at the Jackson Hole symposium in late August 2021. According to the CME FedWatch Tool odds, a rate cut is expected at the September 17 meeting.

However, Bitcoin did not react positively to the prospect of lower rates and a weaker dollar. Instead, it settled under $111,000, a significant drop from its previous levels. The reason for Bitcoin's inability to hold rallies is attributed to crowded positioning and predatory liquidity sweeps.

Friday's $3,000 Bitcoin reversal was caused by long liquidations, erasing $63 million in hours. Market makers were observed hunting stops and resetting direction during the reversal. The crypto crowd is positioning for upside, but the price action suggests indecision.

Traders are eyeing the $100,000 line in the sand, not as a sign of doom, but as a potential hedge against reality. The weekly close of Bitcoin is crucial; without a strong candle above $112,500, a confirmed bottom near $107,500 cannot be declared. Bulls need a weekly close above $112,500 to avoid a retest of $100,000.

Until the weekly close above $112,500, Bitcoin's price action is described as volatility theater, with leverage as the main character. On the other hand, open interest in Bitcoin futures is hovering at record highs near $80 billion.

Interestingly, over $2 billion in stablecoins were parked on exchanges in the last 24 hours, indicating potential rotation into Bitcoin and Ether. The short-term structure of Bitcoin remains intact, as it continues to build an uptrend with higher highs and higher lows. A decisive close below $109,500 could change this.

In contrast, the U.S. nonfarm payrolls print for August was 22,000 jobs, lower than the expected 75,000. This disappointing jobs report promptly led to the dollar tanking. June's payrolls showed a decrease, and August full-time jobs fell by 357,000. The previous months' payroll numbers were revised downward, showing a negative trend.

Bitcoin is set up for a big move, but it's still deciding whether to play the role of hero or villain. As the market continues to watch Bitcoin's price action with bated breath, it remains to be seen how the digital asset will respond to the Fed's impending rate cut and the struggling U.S. economy.

Cryptocurrency Bitcoin Stumbles Following Payroll Surprise: Accumulated Gains Disappear, Potential for $100,000 Evaluation Awaits