Bitcoin’s 200-Day SMA Shows Bearish Momentum Ahead of U.S. Jobs Data

Bitcoin’s 200-Day Simple Moving Average Faces Bearish Momentum

The 200-day simple moving average (SMA) of bitcoin (BTC), a crucial indicator for assessing the long-term trajectory of the leading cryptocurrency, is showing signs of losing its bullish momentum. This shift comes just ahead of the release of key U.S. jobs data, which is anticipated to impact the Federal Reserve’s outlook on interest rates.

Since late August, the SMA has averaged a daily increase of less than $50, a stark contrast to the more than $200 daily fluctuations observed earlier this year, according to data from the charting platform TradingView. Currently, the SMA is positioned at approximately $63,840, while bitcoin’s spot price stands at around $55,880.

This decline in volatility suggests that the moving average has reached a critical stagnation point for the first time since October, hinting at a potential pause or an impending shift towards a bearish trend. The possibility of such a trend cannot be dismissed, especially as the short-term moving averages, including the 50-day and 100-day measures, have already peaked and begun to decline. Notably, the 100-day SMA has recently dipped below the 200-day SMA, confirming a bearish crossover.

Collectively, these indicators point towards a weakening bullish sentiment and a growing sense of caution among investors, which aligns with the increasing macroeconomic uncertainties. “The market appears quite bleak at the moment, with rapid pricing reflecting global recession risks,” noted the newsletter service LondonCryptoClub in a recent post on X. However, they suggest that a final downward movement in BTC might pave the way for a more substantial rally.

Alex Kuptsikevish, a senior market analyst at FxPro, echoed these sentiments, stating that the prevailing risk-off mood within the broader financial markets is not benefiting bitcoin as much as it is aiding gold. “Despite the dollar’s weakening, financial markets remain anxious and expectant, which is not playing to bitcoin’s advantage,” Kuptsikevish remarked in an email to CoinDesk. He pointed out that a critical technical support level for BTC/USD hovers just above $54,000, but a sudden spike in volatility could briefly push the price below $53,000.

The daily chart reveals substantial support near the $50,000 mark, marked by a trendline that connects the corrective lows established in May and July. Interestingly, several market analysts, including Arthur Hayes, co-founder and former CEO of the crypto exchange BitMEX and now chief investment officer at Maelstrom, have expressed expectations for BTC to dip to the $50,000 threshold. “BTC is feeling heavy; I’m aiming for sub-$50k this weekend. I’ve placed a cheeky short. Pray for my soul, for I am a degen,” Hayes tweeted on X.

Price volatility is likely to increase with the upcoming U.S. nonfarm payrolls report (NFP) for August. According to FXStreet, there is an expectation for a rise of 160,000 jobs, following a previous increase of 114,000 in July. The jobless rate is projected to fall to 4.2%, down from July’s near three-year high of 4.2%.

A weak jobs report could intensify recession fears and heighten the possibility of a 50 basis point interest rate cut by the Federal Reserve this month, potentially creating a support base for risk assets, including bitcoin. Nevertheless, traders should remain vigilant against a repeat of the growth scares experienced in August, both in the stock market and the cryptocurrency sector, as highlighted in discussions earlier this week.