Bitcoin traded around $78,524, down 0.72% on the day as crude oil prices crept toward $100 per barrel. Rising energy prices were driven by geopolitical tensions between the United States and Iran in the waters of the Strait of Hormuz. The market correction quickly spilled over to Wall Street, with the Dow Jones Industrial Average closing down 614.88 points, or 1.15%, to 52,799.37. The S&P 500 followed with a 0.37% decline to 7,689.80, while the Nasdaq composite slipped 0.19% to 26,457.73.
Labor Market Stalls Fed Moves
The US jobs report showed an addition of 162,000 new positions in August, nearly tripling expectations of 53,000 jobs. The unemployment rate held steady at 4.1%. The strong hiring figures give the Fed room to reconsider its plans to cut interest rates.
Markets are pricing in a 57% probability that the Fed will raise interest rates by 25 basis points at its September 15-16 committee meeting. The potential hike fueled bearish sentiment across risk assets as borrowing costs rise, prompting traders to park funds in risk-free instruments. These calculations could shift following Friday’s inflation report, scheduled to be the final macro indicator before the central bank meeting.
Conflicting Technical Signals
Bitcoin price parameters remain above the golden zone between $73,986 and $75,569. The Relative Strength Index (RSI) sits at 60.4. The cryptocurrency remains in bullish territory even though the RSI retreated from 66.1 a week ago. Trend momentum remains solid, as measured by the Average Directional Index (ADX) at 47.2.
The 50-day Exponential Moving Average (EMA) continues to trade below the 200-day EMA, confirming short-term downward pressure via a bearish crossover. On the other hand, August’s closing performance saw Bitcoin cross above its 50-month moving average. A monthly close above this threshold has not occurred since the crypto winter ended last year.
HSBC Remains Confident in Stocks
Probability analytics platform Myriad estimated a 78.4% chance that Bitcoin will climb toward $84,000 before dropping to $55,000. While crypto forecasts weigh targets for further corrections, a report from banking institution HSBC raised its year-end target for the S&P 500 to 8,100, despite a string of negative trading sessions this week.
The divergence in market sentiment highlights the lack of a clear consensus on the impact of higher interest rates. Reported via Decrypt.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
