Bitcoin prices prolonged losses on Friday as the US dollar gained alongside long-term government bond yields.
Downward pressure on the cryptocurrency remains amid expectations of modest employment growth in the US.
The technical support offered by the 20-period moving average on the four-hour chart maintains Bitcoin’s bullish medium-term outlook.
Bitcoin fell on Friday, suggesting the benchmark cryptocurrency could continue to decline for the week, followed by an equally depressing weekend session following the soaring US dollar and a recent spike in US Treasury bond yields.
Bitcoin short term goals
The BTC / USD spot rate fell 2.43 percent on the daily session. On the flip side, the pair has been trading positive since the start of the week, up more than 4.5 percent ahead of the weekend session. The price movement was nonetheless restless and gave no indication of its direction in the coming meetings.
Bitcoin appears to be caught between two moving averages. Source: BTCUSD on TradingView.com Technically, Bitcoin appeared to be trapped in an area defined by two of its key moving averages. The cryptocurrency tested the moving average of 50 periods as resistance and the moving average of 200 periods as support.
A rally of 200 MA on Friday pushed BTC / USD down towards 50 MA for a bullish breakout attempt. Even so, higher selling pressures near the last wave prevented prices from flourishing upwards. This demonstrated the resilience of traders, possibly related to an adverse macroeconomic climate.
Job data, bond yields, US dollars
Traders limited their bids near the local BTC / USD spikes as Bitcoin formed a positive correction in the US stock market against the prospect of rising US Treasury yields. Both markets fell last week as a bond sell-off raises questions about whether the low interest rates that fueled both Bitcoin and US stocks last year could last any longer.
Yields, which rise as bonds fall, have risen in response to expectations for faster US economic growth, led by a faster vaccination program and inflation expectations.
The 10-year US Treasury Department’s return was unchanged on Friday but rose to 1.547 percent in the previous session.
This was the highest benchmark cost of borrowing closing price since February last year. The surge on Thursday came when the Federal Reserve gave Jerome Powell no signs that the central bank would step in to contain the ongoing sell-off in the US sovereign debt market.
The US dollar benefited from global market uncertainty as its value against a foreign currency basket – known as the US dollar index – rose 0.75 percent on Thursday. The index rose 0.31 percent on Friday.
The US dollar index is rising due to the uncertainty in the world market. Source: DXY on TradingView.com Further tailwinds to dollar growth came from early estimates that the US labor market would rebound in February.
“Reopening the economy inch by inch will trigger consumer spending and fuel employment growth, especially in industries hardest hit by the pandemic,” said Nela Richardson, Ph.D. Economist at the personal software company Automatic Data Processing Inc.
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