🚀 Bitcoin (BTC) Eyes $43,000 Support Level Amidst Strong US Jobs Report and Spot ETF Hopes

Bitcoin (BTC) dropped below the $44,000 mark and is now looking to retest $43,000 following positive US job data.

Bitcoin (BTC) falls to around $43,000 due to investors considering the positive US jobs report and monitoring the approval of upcoming spot ETFs.

Bitcoin (BTC) Price Chart / Source: TradingView

Bitcoin (BTC) has fallen below the $44,000 mark and is now eyeing a test of the $43,000 level once again. This drop comes in the wake of a stronger-than-expected US jobs report and growing anticipation for the approval of spot Bitcoin ETFs in the US.

The latest US jobs report showed that companies added slightly more employees than anticipated in December, with the unemployment rate remaining unchanged and wages growing at a faster pace than expected. While this data is positive for the overall US economy, it had little impact on the broader market.

Major US equity indices stabilized after a tough start to the year, along with US government bond yields and the US Dollar Index (DXY). These factors did not provide significant tailwinds or headwinds for the Bitcoin market.

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However, an important takeaway from the report is the expectation for the Federal Reserve to start cutting interest rates in March. The potential for Fed easing is seen as a bullish narrative for Bitcoin in 2024.

According to CME’s Fed Watch tool, the US interest rate futures market implies that the likelihood of the Fed lowering interest rates by at least 25 bps by March is nearly 75%. This suggests increasing confidence in Bitcoin’s potential as a hedge against inflation.

📈 Where Next for Bitcoin (BTC)?

Currently trading around the mid-point of the $41,500-$46,000 range, Bitcoin is likely to remain tentative and consolidative as the market awaits the expected approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC). Most analysts are betting on approval before January 10.

The approval of spot Bitcoin ETFs is widely regarded as a long-term bullish factor for the Bitcoin market. It represents a regulatory stamp of approval for Bitcoin as an asset, making it easier for institutional investors to gain direct exposure. The anticipation of this approval has led to a wave of new demand.

However, there are concerns that after Bitcoin’s significant 70% surge since October’s lows, there is a risk of a “sell-the-fact” reaction to spot ETF approval. This scenario involves traders aggressively taking profit once the bullish event is confirmed, triggering a sell-off.

For now, Bitcoin remains in a bullish trend channel. If spot ETF approval is followed by strong initial demand for BTC spot products from investors, Bitcoin could continue its run towards the 2022 highs in the $48,000s. On the other hand, a break in the current uptrend could lead to a retest of levels below $40,000.

Yet, any setback to sub-$40,000 levels would likely be short-lived and could present an excellent opportunity for dip buyers. Additionally, the upcoming Bitcoin issuance rate halving in April, coupled with potential Fed interest rate cuts, could further strengthen Bitcoin’s position.

Bitcoin appears to be following its typical four-year market cycle, with a one-year bear market followed by a three-year bull run. It has been 14 months since Bitcoin hit bottom in 2022 and the price has since surged by around 180%. Therefore, new all-time highs above $69,000 remain a real possibility for 2024.

🤔 Q&A

Q: What impact did the US jobs report have on the Bitcoin market? A: Although the latest US jobs report showed positive economic indicators, it had little impact on the broader market or Bitcoin. Instead, the main focus for Bitcoin investors is the expectation for the Federal Reserve to start cutting interest rates in March, which is seen as a potential bullish narrative for Bitcoin in 2024.

Q: How likely is the approval of spot Bitcoin ETFs in the US? A: Most analysts are betting on the approval of spot Bitcoin ETFs by the US SEC before January 10. Approval of these ETFs is considered a long-term bullish factor for the Bitcoin market, as it signifies a regulatory stamp of approval for Bitcoin as an asset and facilitates institutional investors’ direct exposure to Bitcoin.

Q: What is the potential market reaction to spot ETF approval for Bitcoin? A: There is a risk of a “sell-the-fact” reaction to spot ETF approval, where traders aggressively take profit once the bullish event is confirmed, leading to a sell-off. However, if spot ETF approval is followed by strong initial demand for BTC spot products from investors, Bitcoin could continue its upward trend towards the 2022 highs in the $48,000s.

Q: What is the significance of the upcoming Bitcoin issuance rate halving? A: The Bitcoin issuance rate halving, scheduled for April, has historically preceded massive run-ups in the BTC price. This event, combined with potential Federal Reserve interest rate cuts, could provide further tailwinds for Bitcoin in 2024.

Q: What is the market outlook for Bitcoin in 2024? A: Bitcoin looks set to continue following its usual four-year market cycle, with a one-year bear market followed by a three-year bull run. Given the 180% surge in price since hitting bottom in 2022, new all-time highs above $69,000 remain a real possibility for Bitcoin in 2024.

📚 References

1. Matrixport Founder Says Dissemination of Bitcoin ETF Report Beyond Control
2. Bitcoin Design Foundation Launches, Supporting the Design of the Bitcoin Ecosystem
3. Bitcoin (BTC) Price Pumps Towards $45,000 As Reporter Claims SEC to Approve Multiple BTC ETF Applications, News Expected Soon or Tomorrow
4. Expected Fed Rate Cuts Support the Bull Case for Bitcoin
5. Hashdex Drops New Ad Spot Ahead of Potential Spot Bitcoin ETF Approval
6. CBOE Predicts Spot Bitcoin ETFs to Draw Investments From Pension Funds and Riabased Funds
7. Citi Alumni-Founded Startup to Offer Bitcoin Securities, Needs Green Light from the SEC
8. Bitcoin Halving 2024: Miners Predict Potential Outcomes

🤝 Join the Discussion and Share on Social Media

What are your thoughts on Bitcoin’s current price movement and the potential impact of spot ETF approval? Share your insights in the comments below and don’t forget to share this article with your friends and followers on social media!

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This article is not financial advice. Investing in cryptocurrencies involves risk, and you should always do your own research before making any investment decisions.

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