Bitcoin breaks its weeks-long silence and bullishly bursts into its first working week after the holidays. The cryptocurrency reached the $17.1k level, and continues its upward movement to the $17.4k level.
It is important to note that the increase in trading activity occurred on Sunday. Bitcoin managed to consolidate above $17k and continues its upward movement on Monday.
The positive start of the trading week may be indirectly related to the positive statistics of the U.S. labor market. According to data released on Friday, January 6, the unemployment rate rose by 3.5% against forecasts of 3.7%. Nonfarm payrolls rose by 223,000, while the forecast was 200,000.
Labor market statistics once again prove that the U.S. economy remains resilient, despite the impending recession. On the one hand, this gives investors additional confidence in stability, but on the other hand, it gives the Fed a free hand to further raise the interest rate.
Minneapolis Fed President Neel Kashkari has already stated that it is necessary to pause in raising the rate only after reaching the target level of 5.4%. The strength of the U.S. labor market and other economic indicators give the Fed the opportunity to implement its strategy to the fullest.
Bitcoin and SPX
A similar upward movement in the S&P 500 stock index played no small role in BTC reaching $17k. As of January 9, the trading index had formed a bullish takeover pattern thanks to the activation of a large buyer.
The cryptocurrency market lacks the same volume as the stock market, and therefore Bitcoin managed to reach the $17k level. At the same time, the SPX came close to the $4,000 mark. However, for the final confidence in the bullish potential of the current week, it is necessary to wait for the opening of the U.S. markets on Monday.
Bitcoin’s long-term consolidation is nearing its end, and the asset has taken the first step towards a bullish strategy. The fluctuation range of $16.4k–$16.9k is gradually receding into the past, and the $17.4k–$17.8k level is already looming on the horizon.
However, a similar situation already took place in mid-December, when Bitcoin made a false breakout the $18k level. Then the cryptocurrency grew on low volumes and barely absorbed the bears’ volumes. The volumes at which BTC broke through the $17k level can also be characterized as low.
The next two days will be key in understanding the future prospects for Bitcoin price movement. If the asset continues its upward movement with the growth of on-chain activity and trading volumes, then there is a possibility of a final consolidation above $17k.
However, if a major buyer does not appear and the SPX starts to correct, then the probability of a false breakout will increase significantly, and the price will return below $16.9k. As of writing, the bullish idea for Bitcoin remains relevant. If the asset gains a foothold above $17k, then after local consolidation, the nearest targets for BTC will be $17.4k and $17.8k.
The cryptocurrency market cheerfully started the new trading week, slight increases in trading volumes are visible. This is not enough to implement bullish impulses, so everything will depend on activation of large buyers and dynamics of S&P 500 price movement.
The material has been provided by InstaForex Company – www.instaforex.com