hey everyone and thanks for jumping back into the cryptoverse today we're going to talk about Bitcoin going into the labor market release data if you guys like the content make sure you subscribe to the channel give the video a thumbs up and also check out the sale on into the Crypt premium at intothe crypt. of [Music] will also be curious as to where that comes in if you go look at the sort of the calendar for tomorrow we've got a lot of stuff coming in right we've got average average hourly earnings um uh we've got like the unemployment rate obviously and and all the artifacts of that that come with it we've got the total non-farm employment level total temporary Help Services employees and so on and so forth right there's a lot of data coming in tomorrow what we've seen happen so far this we week is the labor market data has actually been coming in mostly better than expected with a few exceptions I believe the ADP employment data Maybe came in um it wasn't too far off from from I I I think expectations but for the most part the data this week has been mostly good um and in fact it's sort of you know we've sort of transitioned recently into a good news is bad news phase um if you think about the data that has come out this week uh and how Bitcoin has reacted to it and the markets overall like if you look at initial claims they're down to 201,000 right this is really low um now if you go back and look at last year right you can also see that initial claims were dropping into the same time frame right it sort of dropped and then bottomed out mid January and so that's kind of where we're we're about to get to but because of all this good data that has come in and given the fact that the FED has cut interest rates by 100 basis points it's actually caused the long end of the yield curve to Rally quite a bit and and because of that right because of of that rally it is taking this the wind out of the sales for Bitcoin and for risk Assets in general so and we have talked about this a few times before if you just simply look at the 10-year yield and and look at you know sort of the pattern this year as as opposed to last year it it's very similar in the sense that you have sort of a very similar breakout and then a a hold of the 21 we EMA right there and right there and when that happened in both years Bitcoin then struggled for a little while so it's interesting because you know for a long time good news was good news news right you know if the labor market data came in good then we would actually see Bitcoin do fine right but I I suppose one of the reasons for the transition recently was mostly due to the fact that we've seen you know a 100 basis points of rate cuts and you're seeing the labor market data come in a lot better than expected right job openings also came in better than expected in fact if you were to Overlay or if you just simply look at job openings I mean it's not like it's that high it's still right around 8 million but this was a pretty you know we've had a couple of big jumps over the last two months now of course the glass half empty person will say well this could just end up being a lower high but an optimist might say well job openings topped out when the FED began raising rates in March of 2022 what if job openings bottomed in September 2024 when they started to cut rates and you know if you're thinking about the market like that and you're saying well all of a sudden job openings are doing okay initial claims are about as low as they've ever been right I mean not too far you know higher and you have all this great data then the question remains like well why does the FED need to cut 100 basis points right why do they need to cut 100 basis points obviously the fed's trying to get ahead of any weakening or any sustained weakening in the labor market and so it appears uh that in the short term what has happened is the good news that we've been getting has been causing the long end of the yield curve to go up and I think it's sort of the the bond market revolting and saying hold on a second why are we so worried about Labor when maybe we should be worried about re acceler ation right and and and therefore if that's the case then the 10year yield was you know too low back in September in fact if you actually look at the the two-year yield right if you look at the two-year yield we talked about this when the FED cut rates one of the things we said was that it would likely bounce as the FED cut and you can see that it did right it got a really strong bounce here's where the FED cut in September following that rate cut the 2-year yield bounc a lot and essentially what it did was it just swept this low and it's the same idea right if the fed's cutting here but the economy isn't slowing and if the labor Market's not absolutely falling apart then what other choice you know do yields have other than to get this bounce until the the risks come into better balance right so what I think is what what I think has happened is the market has has you know it's been looking at the data it's seen a couple of of inflation prints come in kind of hot the labor market look okay and it asks why is the Fed cutting right why is the Fed cutting and so I think you could argue that that is one of the main culprits for not just to sell off by Bitcoin but also the selloff by risk Assets in general right it's not like the S&P has been doing that great either right the S&P has also been struggling now one of the things to note here with Bitcoin is that it is at a sort of a prior support level right I mean this is not like it's the first time that Bitcoin has fallen down to these levels in fact you can see that Bitcoin hit this level back in late November it also tagged this level in early December and it even tagged it in late December as well so we've actually seen Bitcoin go to this price a number of times over the last few weeks right and so far every time it went to that level it did ultimately bounce back up in fact if you were to look at the the the daily RSI you know you could try to argue that maybe it's trying to sort of form a double bottom right there but one of the interesting things that I would say is you know what happened last year right around the same time because a lot of the s a lot of market conditions are the same some are different but there are some similarities in the sense that you know you still had a high you know you still had relatively high yields you had U quantitative tightening yes rates were a little bit higher but for the most part the structure of the market looks somewhat similar the main difference is that last year in early January it rallied to a higher high but this time the January the early January rally just led to a lower high but what you'll notice is that after that rally last year you can see that Bitcoin also had a very similar structure right where it had these lows that it was holding now back then it was about 40K that was holding as support today it's around 90k right so obviously the support level that it's bouncing off of is a little bit higher right I mean it's you know more than 2x higher but what you also will notice is that Bitcoin did eventually sweep all of those lows right and it actually put in a a sort of a lower low from this entire range and we have talked about you know that outcome as well right where it where it eventually sweeps those lows and you can see the last year it didn't sweep those lows until late January right like January 22nd so it would be another like week and a half from now um so that I I think is is something to consider here as well because the prior low you know is around down is just above 90k it's like 90. 7k the prior low over here that eventually got swept was 4.
1k right so nice round numbers in both cases 40K 90k eventually last year we saw Bitcoin go all the way down to 38k all right now what is interesting is that if you look at where Bitcoin actually found support last year it ended up not even being the bull Market support band it was actually the 100 day moving average right so Bitcoin ultimately fell to the 100 day moving average and that's where it ultimately found support today the 100 day moving average corresponds to approximately 85k okay now I don't know you know exactly what's going to happen here but one of the things that's interesting is that this Wick here happens to correspond to right around $85,000 okay and we have seen scenarios in the past where you you know you have one of these Wicks and then eventually Bitcoin sweeps that Wick before then getting another bounce back up so that's also something to consider here over the next week or two is let's suppose you do get a bounce right let's suppose you do get a bounce you could still see it go down here eventually sweep that Wick and maybe tag the 100 day moving average before then getting another bounce what you'll also notice is is that in 2024 in May Bitcoin essentially went down to its 100 day moving average before then getting back up you know getting a bounce back up to near those range highs so that's another thing to consider now again there's no guarantee that we even see the 100 day SMA but it's an important level to recognize um especially if we give up that level right there right and I mean you could always have a scenario where you know it it it bounces but then it still doesn't lead to a higher high and we've seen that happen a lot with Bitcoin like where it'll get into a range and then before it it moves up it has it'll like sweep the low right we've seen that happen so many times um throughout this cycle where it'll you know it'll sweep the low and then it'll find some renewed strength whether it leads to a higher high or not uh isn't as relevant right it would at least try to kind of like it did here right it eventually you know swept the low down here and moved up but it wasn't enough yet and then it had to sweep the low again and then then it it went so it basically it was Bitcoin would go a little bit lower a little bit lower until it found enough buyers to then lead it to you know new highs once again so um but again one of the things that this reminds me of as well is just you know if you look at last year uh Bitcoin did something very similar especially when you're looking on the weekly time frame where it moved up in October November and then basically just went sideways for a couple of months and so you know you could argue something like that's happening now um you might say this isn't really sideway ways but again all things considered you know just a few you know back in November that was the first time we had even seen Bitcoin go above 90k now 93k feels kind of low so I it just kind of shows you how quickly um sentiment can in fact change the bull market support ban for Bitcoin is actually a little bit lower than 85k right that's actually all the way down around 79k to 83k and you know some people have said well what's the worst case scenario in the short term um and I i' I've sort of pointed this out before I don't really think it it should necessarily be a base case unless you start losing the 100 day and if you lose the bull Mark s band you could always potentially retest that level um that it it sort of broke out from right if if that became support and it and it might even correspond you know much later on where the 100 we moving average you know is is all the way up at that point as well um but I I did want to at least talk about it going into the labor market release and and what's interesting is is normally when when you get the labor market release bitcoin's not at the range lows right it's not a lot of times it's actually at the range highs right if you look at last year one of the things you'll notice is that you know this was I mean this was like mid-march but if you look at at a lot of the labor market releases right the one of the labor market releases came like right here in early April um you had one here in you know up in this range over here in in early June um you had one here in in early August as well uh so not a lot of them were actually at the lows the one of the ones that was at the lows was the one back in May of 2024 and then in in July I suppose this one here in September was also at the lows but a lot of the ones we've seen right here was you know September early October and then this one here was you know early November and then this one over here was early December right A lot of them we've seen Bitcoin sort of higher up so and even over here right even if you go back to to early or sorry late 2023 you'll see there was plenty of times where we were closer you know sort of some of those highs than we were at the lows like right there we were closer to those range highs than the range lows it's not that you're never at the range lows as the labor market data comes in it's just that you know Bitcoin tends to be kind of at the range highs sort of an anticipation of of a breakout right so what's interesting is had you asked me a week ago I would have said and I think I did say and maybe this is still the correct way to think about it but what I would have said and what I said was that if the unemployment rate comes in low then it would likely lead to a rally by Bitcoin right and if it comes in high then it might lead to a selloff and it makes sense like that seems like the most likely outcome but it also like I don't want to ignore what's happened this week where the labor market data has actually come in quite quite good and and Bitcoin has has just struggled right and I think the reason is because as we showed earlier right not only has the 10-year yield been rallying but also the dollar right I mean the dollar is at 109 right now and you know we talked about that as well uh that the dollar would likely rally after rate Cuts I know a lot of people back then were very bearish on the dollar right there in September and you can see that the dollar has basically just been up only since then now I do think the dollar will likely top out sometime in q1 of 2025 but it does go to show you just how quickly The Narrative can change right you know it used to be oh the dollar is going to collapse and that'll lead to alt season but instead the dollar just exploded higher into the end of 2024 and um and we just sort of Saw Bitcoin take over once again uh which is actually what happened in 2016 right that's what happened in in 2016 as well so tomorrow is probably going to be somewhat tricky because you know I I think from like sort of like a um more of the like the obvious perspective is just well labor if the Labor's if labor Market's good then you know risk assets generally bounce when that happens if labor Market's bad then risk assets would likely sell off but we're kind of in a in a phase right now where it's not as obvious because of the 10year yield because of of how it's breaking out and and how it has been breaking out so one of the things you know and here right if you look if you actually overlay the S&P 500 to when the or to when the 10-e yield broke out last year you can see that the S&P did not bottom until the 10e yield topped you see that it didn't bottom until the 10e yield topped and so the question is is well where is the 10e yield actually going to top is it going to come back all the way up here and sweep that high which is a possibility and it it might be my base case um because if you look at at things like TLT which is just like the inverse of of that you'll see that a lot of the lows that occur on TLT over sort of longer time Horizons tend to be double bottoms right and and that's actually happened quite a bit uh where you sort of get these double bottoms on on TLT and sometimes they'll even you know sort of sweep the low and so that low is right there and I I just wonder if that means that that TLT will will then drop back down here um and and sweep that low and if it does mean that right if if if the 10year yield is headed down here then wouldn't the implication of that be that the labor market is still doing somewhat okay and what's really interesting is you know we've seen the unemployment rate go up but you could argue that the reason it's going up is not because of layoffs right because if you look at the unemployment rate you know it has gone up but I think one of the main reasons it's gone up is not because of layoffs if you look at layoffs and discharges which we just got that data a couple days ago it's still relatively low right so that's when you have to go over to the reason for unemployment right the um if you look at unemployment level by reason for unemployment yes job losers has gone up but what's really gone up in terms of the contribution to the unemployment rate is new entrance into the labor force and that's obvious by the fact that highers are also down and it's also obvious because initial claims are low right so there's not a lot of layoffs suggesting that the unemployment rate is largely gone up due to an expanding Workforce so if tomorrow the unemployment rate comes in relatively low I think consensus expectations is 4. 2% you know if it comes in low then the market um I mean what I would also say a lot of times whatever the initial move is is not like the actual move right so if it if it first sells off that might not be the real move if it first goes up it might not be the real move sometimes what you'll see is the opposite of what it's going to do sort of the following day or a few hours later it'll sort of liquidate people in One Direction and then go the other direction so when you're thinking about you know what are the outcomes for tomorrow I think it depends on you know what's actually going to stop the 10-year yield from going up you would think what's going to stop it from going up would be the labor market starting to weaken um or inflation coming in not so scary right but in until we get a data point that suggests that maybe the labor market is still weakening or maybe inflation isn't going to re accelerate then you can't necessarily blame people in the bond market for demanding higher yields um because you know they're looking at the risks and seeing all the great employment data and wondering you know why does the FED why did the FED need to cut 100 basis points and and will those cuts lead to you know an economy that starts to accelerate again when they're when inflation's still not at their at their target level so I think that's what you should think about going into the labor market release tomorrow you know if it's 4. 2% that's going to just be in line with expectations uh if it you know if it comes in a lot higher right then that'd probably be bad if it comes in a lot lower again you could argue that it it should be good but sometimes the Market's irrational right sometimes the market doesn't do what you think it's going to do based on the data right you could have a sort of a low labor market print um and if the 10-year yield shoots up that could still be sort of a headwind for Bitcoin and and and one of the things you could see too is I mean you could see a bounce and then sort of sweep those lows later on um in in January but anyways those are my thoughts for Bitcoin going into the labor market release hopefully it provides some context uh for for what to look for tomorrow obviously I don't have a crystal ball um but I'm just trying to you know explain what the risks are and and and what you should look for tomorrow as that labor market data comes in and you know and and sort of have some expectation as to what the market May do depending on where those labor market data where that labor market data comes and again there's more than just the unemployment rate coming out but I think the Market's mostly concerned about where that unemployment unemployment rate number is going to actually be thank you guys for tuning in make sure you subscribe give the video a thumbs up and again check out the sale on IND the premium at inth crypto.
