Key Takeaways
Bitcoin ( BTC ) lost ground in early trading on Friday after closing more than 3% lower yesterday as investors braced for the highly anticipated August jobs report due this morning, a key piece in the puzzle for gauging the timing and size of widely expected interest rate cuts by the Federal Reserve later this month.
Although market participants anticipate a reduction of 25 basis points in the influential federal funds rate, a weaker-than-expected reading on employment may increase the possibility of a 50-basis-point cut. Rate cuts could provide a boost to the legacy cryptocurrency, which has fallen around 24% since setting its record high on March 14 amid a lack of new narratives to drive bullish sentiment .
Below, we’ll dial in on Bitcoin’s technicals and locate important support and resistance chart levels to watch out for.
Rangebound Conditions Persist
Bitcoin’s price has oscillated within an orderly channel -like pattern since topping out in March this year, testing the rangebound -period’s upper and lower trendlines on multiple occasions over the past six months.
However, more recently, a rally from the channel’s lower levels last month fizzled around the 200-day moving average (MA) , with the cryptocurrency now trading back towards the pattern’s lower trendline. Bitcoin was trading around $56,000 Friday morning.
It’s also worth pointing out that Bitcoin volumes on Coinbase ( COIN ), the largest U.S. cryptocurrency exchange, remain significantly lower compared to earlier in the year, raising the possibility for sudden price fluctuations due to reduced liquidity.
Looking ahead, investors should monitor several key areas on Bitcoin’s chart likely to command attention.
Support Levels to Watch
If Bitcoin’s price continues to grind lower, keep an eye on the $53,000 level, a location on the chart just below the channel’s lower trendline where the cryptocurrency could find support near a range of narrow consolidation that followed an impulsive move higher in early February.
A breakdown below this important technical level opens the door for a decline to the $47,000 area, where Bitcoin bulls may step in to defend a range of comparable trading levels positioned slightly below the January swing high .
Resistance Levels to Monitor
Upon an upside reversal , investors should monitor the $65,000 level. A rally into this area would likely face resistance from both last month’s high and the flattening 200-day MA.
A successful close above this level could see Bitcoin’s price revisit the $68,500 area, where traders who have bought recent lows may be happy to lock in profits near the channel’s upper trendline and July peak.
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