Bitcoin (BTC) experienced a decline from its 2025 yearly open during Thursday's Wall Street trading session, as markets processed the latest US jobs data.
Key takeaways from the market reaction include:
- •Strong US labor-market data has not diminished hopes for a December Federal Reserve rate cut.
- •The cryptocurrency market continues to show divergence from traditional stock markets, despite predictions of a robust finish to the year for equities.
- •Bitcoin faces several key resistance levels that must be overcome to shift its current bearish trajectory.
Fed's Rate Cut Decision Unavoidable
Data from Cointelegraph Markets Pro and TradingView indicated a weakening in BTC price action following the release of surprisingly low US jobless claims. Both initial and ongoing claims registered below market expectations, according to data from the St. Louis Fed.
Despite this indication of a strengthening labor market and overall economic resilience, markets intensified their expectations that the Federal Reserve would implement an interest rate cut at its upcoming Dec. 10 meeting. Analysis suggests this stance is driven by a growing disparity between risk assets and consumer spending power.
"The Fed has no option: Even as inflation hits 3%, the Fed MUST cut rates to ‘save’ US consumers," trading resource The Kobeissi Letter stated in its recent commentary on X. The analysis highlighted that consumers are facing difficulties while large-cap tech stocks are experiencing significant gains. The commentary concluded that more rate cuts are anticipated amidst one of the hottest stock markets in history, urging asset ownership to avoid being left behind.
"Consumers are struggling while large cap tech stocks are soaring. More rate CUTS are coming into one of the hottest stock markets in history. Own assets or be left behind."
A rate cut would typically support increased liquidity flowing into cryptocurrencies and other risk assets. Earlier reports noted that even the potential for Japan to hike rates in the near future presented a contradictory economic signal, particularly as its central bank finalized a substantial economic stimulus injection. The Japanese situation was described as a "free-for-all," with commentary pointing out the apparent contradiction of Japan printing stimulus while simultaneously considering rate hikes, suggesting a fundamental issue within the system, especially given record-high 30-year bond yields.
Despite market optimism, trading firm Mosaic Asset Company cautioned that future Fed rate cuts are not definitively guaranteed. While market-implied odds suggest a high probability of a third consecutive rate cut, significant disagreements are emerging regarding the future direction of interest rates. The firm noted that while this could introduce volatility into the stock market, underlying market internals are showing favorable developments for a year-end rally.
Analysis: Bitcoin's Bearish Case Persists
With the S&P 500 trading near new all-time highs, Bitcoin and other altcoins have continued to underperform. This divergence raises questions about the market's current dynamics.
Traders are closely watching several resistance levels that Bitcoin needs to reclaim. In addition to the $93,500 yearly open, significant points of interest include liquidity zones closer to $100,000, as well as the 50-week simple moving average (SMA) and exponential moving average (EMA).
Trading resource Material Indicators indicated a potential retest of the 50-Week SMA, but emphasized the necessity of clearing resistance in the $96,000 to $98,000 range first. The analysis suggested it is too early to confirm a bull market recovery, stating that these resistance levels must be cleared with a healthy Relative Strength Index (RSI) on the weekly close before such a conversation can be had.
"Looking for a retest at the 50-Week SMA, but need to clear resistance in the $96k - $98k range first. Too soon to call this a bull market recovery. Need to clear those resistance levels with a healthy RSI at the Weekly Close before we can have that conversation."
In a subsequent update, Material Indicators suggested that Bitcoin's failure to reclaim the yearly open thus far is an indication that the bearish thesis remains strong. Previous reports have highlighted various BTC price indicators attempting to signal the end of the market's recent bearish phase.