Unemployment Rises as Bitcoin Bulls Hold On to Hope

Overnight we received a key data figure that typically plays a major role in central bank decision making: unemployment. Both inflation and employment data are considered when deciding whether to cut, hold or hike rates. So why are we getting employment figures now after the Federal Reserve already cut rates last week?

As many of you would know, the US government recently experienced its longest shutdown in history, lasting 43 days from late September to early November. During that period, the Bureau of Labor Statistics was closed, meaning key data releases were delayed. The employment data released overnight was from November and should have been published 11 days ago.

The figures showed the unemployment rate rising to 4.4% from the forecasted 4.3%, matching the September figure. While a rise in unemployment may appear negative, it actually helps in the fight against inflation. Fewer people in work generally leads to reduced consumer spending, which can ease inflationary pressure. This type of data supports the Federal Reserve’s broader goal of cooling the economy, giving them more confidence to cut interest rates if inflation continues to trend lower.

Had this data been released on time, it likely would not have altered the Fed’s decision. If anything, it could have increased the probability of the rate cut we saw last Thursday.

Looking ahead to the next interest rate decision in late January, this delayed figure will no longer be relevant as a fresh employment report will be released next month. That is why the market reaction overnight was muted, even though such data would typically create some volatility.

Stormrake Spotlight: Pax Gold (PAXG) ($4,326)

PAXG saw minimal movement yesterday, in line with broader activity across traditional markets. Price action remains constructive following a strong performance last week. With momentum still favouring the bulls, price continues to work its way toward $4,400.

BTC/USD Key Levels and Price Action:

Bitcoin bounced from the key support level at $85.2k, which we outlined yesterday. The medium term structure (MTF) remains in play as long as price holds above the blue rectangle at $84k, which would confirm a higher low and keep the broader bullish structure intact.

Short term, momentum and structure still favour the bears. BTC remains below the range it traded in for most of the last month, with the lower bound of that range sitting at $88,888. This keeps the door open for further downside. However, bulls still have a case as long as the $84k level holds and a higher low is confirmed. If so, we could see a move back into the range and potentially a retest of the yearly open at $93.5k.

BTC Total ETF Flows for 16 Dec: $ - 75.2 million…

*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

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