Bitcoin’s 200-day simple moving average (SMA), a widely recognized indicator of the cryptocurrency’s long-term trend, is on the verge of losing its bullish momentum. This stall comes just ahead of the release of critical U.S. nonfarm payroll (NFP) data, which is expected to influence the Federal Reserve’s interest-rate outlook.
Data from TradingView shows that since late August, Bitcoin’s 200-day SMA has averaged a daily increase of less than $50, a significant drop from the $200-plus moves seen earlier this year. As of now, the 200-day SMA stands at $63,840, with Bitcoin trading at $55,880. This reduced variability marks the first time the average has hit stall speed since October, signaling either a pause or a potential bearish trend reversal.
The weakening momentum is further evidenced by bearish crossovers in shorter-term moving averages. The 100-day SMA recently dipped below the 200-day SMA, while the 50-day SMA has also turned lower, indicating a potential shift in sentiment. These signals suggest growing caution among investors amid increasing macroeconomic uncertainties.
“Looks pretty ugly out there right now, [with the] market rapidly pricing global recession risks,” the LondonCryptoClub newsletter said on social platform X, while also noting that a final dip in BTC could pave the way for a larger rally.
Market Sentiment and Technical Levels
Alex Kuptsikevich, senior market analyst at FxPro, commented that broader financial market conditions aren’t favoring Bitcoin, despite recent weakness in the U.S. dollar. “The financial markets are still in an anxious and expectant mood, which is not helping Bitcoin as much as it is helping gold,” Kuptsikevich told CoinDesk.
Kuptsikevich pointed out a critical support level just above $54,000, warning that a spike in volatility could see Bitcoin briefly drop below $53,000. The daily chart also highlights major support at around $50,000, with a trendline connecting previous lows reached in May and July.
Predictions of a Dip Below $50,000
Some market analysts, including Arthur Hayes, co-founder and former CEO of BitMEX, are predicting a drop in Bitcoin’s price. Hayes, who now serves as the chief investment officer at Maelstrom, expects Bitcoin to fall below $50,000. “I’m gunning for sub $50k this weekend,” Hayes posted on X, sharing that he had taken a short position on Bitcoin.
Impact of Nonfarm Payrolls Data
The upcoming U.S. nonfarm payrolls report for August is expected to have a significant impact on market sentiment. Economists forecast a 160,000 increase in jobs, following July’s rise of 114,000, with the unemployment rate projected to drop to 4.2%. A weaker-than-expected jobs report could intensify recession concerns and increase the likelihood of a 50-basis-point rate cut by the Federal Reserve, which could potentially provide support for risk assets like Bitcoin.
However, traders should be cautious of any growth scares similar to those witnessed in August, which could trigger volatility across both stocks and cryptocurrencies.
