On the daily chart below, we can see that Bitcoin reached the resistance at 24245 where the price got rejected as the very strong NFP report triggered a repricing in interest rates expectations. Bitcoin is mainly driven by looser financial conditions and risk sentiment.
In fact, we saw a big rally since November as the market was pricing falling inflation and rate cuts for this year. The stock and the bond markets saw strength and eased financial conditions. Risk sentiment was favourable for risk assets and Bitcoin benefited from that.
Now though, the market is looking for higher rates and rate cuts are being priced out. This should be bad for Bitcoin in the near future. The moving averages are also pointing south now.
On the 4 hour chart below, we can see that the price bounced from a previous swing point at 21500.
There’s a strong resistance at 22500 where we have confluence from a trendline, previous swing levels and 50/61.8% Fibonacci retracement level. That zone will be the last line of defence for the sellers. If the buyers manage to breakout, we may see another rally towards the previous high at 24245.
On the 1 hour chart below, we can see more closely the levels of interest for the sellers. We may see good moves today as US Retail Sales data get released. The market expects positive numbers. If the data beats expectations, we may get a sell off in Bitcoin as now good news is bad news for risk sentiment as the market looks for higher rates.
If the data miss expectations, we should see the price rallying into the resistance area at 22700. That will be the last line of defence for the sellers. For what it’s worth, neither a beat nor a miss should be good for risk sentiment.
