Bitcoin’s momentum hinges on a critical labor market report from the United States, which may influence crypto investor sentiment leading into March.
The US Bureau of Labor Statistics is set to publish its US labor market report on Feb. 7. The results may significantly impact Bitcoin’s (BTC) price momentum leading into February, according to Ryan Lee, chief analyst at Bitget Research.
The labor market data will be a “critical factor” for Bitcoin’s momentum, the analyst told Cointelegraph:
“A strong labor market typically reduces the likelihood of imminent Fed rate cuts, which may result in a dip for Bitcoin prices. If Labor market data shows signs of weakening, it could strengthen the case for rate cuts. Such a shift in policy expectations would likely create a more supportive environment for Bitcoin.”
Bitcoin’s price rose over 13% in January but has struggled to gain momentum as it fell almost 0.5% over the past seven days, Cointelegraph Markets Pro data shows.
Still, some analysts are concerned that Bitcoin may correct below $96,000, based on an emerging technical chart pattern used to measure a momentum reversal. To avoid such a potential correction, BTC will need to remain above the $101,000 weekly support in the short term.
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Bitcoin remains sensitive to macroeconomic conditions, Fed monetary policy
Next week’s labor market report may be a catalyst for Bitcoin’s price leading into the next two months.
However, the “sweet spot” for Bitcoin would be an unemployment rate of around 4.1%, according to a Jan. 31 X post by Benjamin Cowen, founder and CEO of Into the Cryptoverse, who wrote:
“If the unemployment rate is 4.1% or 4.2%, then there is a higher probability that BTC will follow the blueprint from last year and go higher in Feb/Mar. If the unemployment rate is too much higher, then it could make BTC a little bit more unsure.”
Related: Czech National Bank governor to propose $7B Bitcoin reserve plan
Meanwhile, Bitcoin’s price remains sensitive to economic developments, particularly to the tightening monetary policy of the Federal Reserve.
Markets are now expecting the next US interest rate cut to occur on June 18, according to the latest estimates of the CME Group’s FedWatch tool.
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