Bitcoin suffers in wake of stock market pull-back

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With cracks starting to form in the US jobs market, the major stock exchanges have been taking a tumble. In addition, a major slowdown in hiring, and uncertainty over the Iran Israel conflict, have conspired to take the Bitcoin price down once again. 

Labour market, stocks, and war weigh on the Bitcoin price

In the recent FOMC meeting, Fed Chairman Powell hinted that a first rate cut in September would be likely. On top of this, he even admitted that should things change drastically before that time, the Federal Reserve could even be forced into a pre-emptive rate cut before this.

The market is concerned, and this was highlighted on Thursday, as the slowdown in hiring became apparent. AI is moving in on jobs, and the labour market is trying to absorb what is a profound, and never before experienced change. The stock market reacted accordingly.

Add this to the latest tit-for-tat retaliation promise from Iran to Israel, after an Israeli missile killed the Hamas leader, Ismail Haniyeh, in Tehran; and you have a backdrop of negative market forces that have spilled over into the Bitcoin price.

Bitcoin at strong support

Source: TradingView

Looking at the $BTC price on the daily chart, it can be remarked that everything still looks very good for the king of the cryptocurrencies. Still within its bull flag, the latest drawbacks in traditional stock markets, if they have had an impact, have just served to keep $BTC down at the $63,500 level, which is also the 0.382 fibonacci level - plus very strong horizontal support.

Those who say that Bitcoin is in a series of lower highs, possibly leading to a major price crash, could be right of course. Famed trader Peter Brandt has pointed out the lower highs, but stops short of saying that a crash is on the horizon. 

Macro indicators critical confirmations at weekly close

Source: TradingView

Looking at a couple of macro indicators, it can be seen with the weekly stochastic RSI that the indicator lines are beginning to turn over. Should this happen and the blue fast line crosses back over the orange slow line, negative momentum will come back into the Bitcoin price.

Also, in the relative strength indicator (RSI), the line is starting to come back below the trend line, signalling that the downward trend will continue.

Both of these indicators have until close of play on Sunday before they confirm. The next couple of days will be very important. Some of the shorter term stochastic RSIs, including the daily, have reset to the bottom, so this is perhaps bullish for the weekend. That said, the market will decide the next direction.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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