On Thursday (September 19), Bitcoin's gains stalled near $62,000. After the Federal Reserve cut interest rates by 50 basis points, traders kept a close eye on the U.S. initial jobless claims data, which was lower than expected and could further ease concerns about a hard landing of the economy, thereby boosting buying in the cryptocurrency market. Technical analysis pointed out that Bitcoin RSI confirmed bullishness, but has not yet entered the overbought area.
The Federal Reserve announced a 50 basis point rate cut on Wednesday, while signaling a soft landing for the U.S. economy, boosting demand for Bitcoin. According to the FOMC economic forecast, the FOMC committee expects the U.S. economy to grow by 2.0% in 2024, down from the 2.1% forecast in June. The forecasts for 2025 and 2026 remain unchanged at 2.0%, supporting bets on a soft landing for the U.S. economy.
In addition, the Fed hinted that the Fed's interest rate path will be more dovish. The FOMC expects the federal funds rate to fall to 4.4% by December 2024, compared with 5.1% in June, and to 3.4% by 2025, compared with 4.1% in June.
Despite Bitcoin's gains, the U.S. Bitcoin spot ETF market faces the prospect of net outflows. The Nasdaq Composite Index succumbed to investors selling the news, and the U.S. Bitcoin spot ETF market may suffer the same fate.
According to Farside Investors data, ARK 21Shares Bitcoin Spot ETF (ARKB) had a net outflow of $43.4 million, compared with a net inflow of $42.2 million the day before; Grayscale Bitcoin Spot ETF (GBTC) had a net outflow of $8.1 million, compared with 0 the day before. Bitwise Bitcoin Spot ETF (BITB) reported a net outflow of $3.9 million, compared with a net inflow of $45.4 million the day before; Grayscale Bitcoin Mini Trust bucked the trend and saw a net inflow of $2.7 million, compared with 0 the day before.
Excluding flows from BlackRock iShares Bitcoin Trust (IBIT), U.S. Bitcoin spot ETFs saw net outflows of $52.7 million on Wednesday, down from net inflows of $186.8 million the day before. The Nasdaq Composite Index fell 0.31% on Wednesday.
On Thursday, U.S. labor market data could further influence Bitcoin spot ETF flows and Bitcoin price trends.
Economists expect initial jobless claims to remain unchanged at 230,000 in the week ending September 14. An unexpected spike in unemployment claims could test the Federal Reserve's growth forecasts, which could affect Bitcoin demand. Conversely, lower-than-expected unemployment claims could further ease concerns about a hard landing for the U.S. economy, boosting Bitcoin demand.
Positive claims data could push Bitcoin to $65,000, while a surge in claims could send it down to $55,000.
Other data include the Philadelphia Fed manufacturing index and housing sector data, which are likely to play second fiddle to labor market data. As the focus turns to U.S. labor market data, the debate over the Federal Reserve's November interest rate decision has begun.
“Now that we know the outcome of the September FOMC meeting, let’s start the premature debate about the November meeting,” said Parker Ross, global chief economist at Arch Capital. “As a reminder, the FOMC decision will be released on November 7, which for those watching is just a few days after Election Day.”
Investors should remain alert as U.S. labor market data could be critical for Bitcoin and the broader market.
Bitcoin Technical Analysis
FXEmpire analyst Bob Mason said Bitcoin is hovering above the 50-day and 200-day EMAs, confirming a bullish price signal.
A break above $62,500 will support gold prices to move towards the $64,000 resistance level. In addition, a break above the $64,000 resistance level could push the bulls to hit the $67,500 mark.
Conversely, a break below the $60,365 support might bring the 50 and 200-day EMA into play. A break below the EMAs could allow the bears to strike at the $55,000 level.
With a 14-day RSI reading of 59.10, Bitcoin could break above the $64,000 resistance level and then move into the overbought zone.
