Key facts
- Bitcoin's price fell to $65,059.59, nearing the $65,000 support level.
- U.S. initial jobless claims dropped to 187,000, significantly below the forecast.
- Stronger-than-expected U.S. employment data suggests the Federal Reserve may keep interest rates higher for longer.
- Higher interest rates typically negatively impact risk assets like cryptocurrencies.
- The market is pricing in a 37.9% chance of a Federal Reserve rate hike at the upcoming FOMC meeting.
Bitcoin experienced a significant price drop, nearing the critical $65,000 support level, following the release of stronger-than-expected U.S. initial jobless claims data. The number of Americans filing for unemployment benefits fell to 187,000 for the week ended July 18, substantially lower than the 212,000 forecast by Wall Street. This robust labor market data suggests that the Federal Reserve has less incentive to loosen monetary policy and may maintain higher interest rates for an extended period.
This economic indicator typically has a negative impact on risk assets such as cryptocurrencies. Investors may shift towards more secure investments when interest rates are high. The hourly chart had already indicated a downward trend for Bitcoin before the economic report, which then exacerbated the decline, pushing the price below the $65,400 support area. Analysts suggest that a drop below $65,000 could lead to further losses, while regaining the $65,400-$65,500 range would be the first sign of strength.
The market is now closely watching the upcoming FOMC meeting on July 28-29. According to the CME FedWatch Tool, there is a 62.1% probability that the Fed will hold its benchmark rate steady. However, the recent jobs data has increased the market's pricing to a 37.9% chance of a 0.25% rate hike. Bitcoin's price is currently at a key technical juncture, with the $65,000 support level being a focal point for traders ahead of the Fed's decision. Experts indicate that a hawkish stance from the Fed could lead to further pressure on BTC.