Cryptocurrency investors are paying close attention to Bitcoin's daily chart as analysts from the alternative asset management firm Valkyrie Investments identified a bearish reversal pattern called "head and shoulders". The pattern is illustrated by two rallies flanked by a bigger one, which is known as the head. When prices drop under the trendline connecting the first and second troughs, it is seen as a sign that the bullish-to-bearish shift in the market trend is imminent.

Valkyrie's analysts suggested that if Bitcoin breaches the neckline support at around $27,300, it would confirm a H&S breakdown, opening the doors for a deeper decline. However, technical analysis patterns are not always indicative of what will actually happen in the market, as macroeconomic developments can either make or break trends and invalidate patterns.

For instance, if the U.S. nonfarm payrolls data that is set to come out on Friday indicates labor market weakness, the Federal Reserve (Fed) might take it as an opportunity to pivot to liquidity-boosting interest rate cuts. The Reuters estimated sourced from FXStreet suggests that the payrolls figure for April is likely to show an addition of 179,000 jobs with an unemployment rate remaining steady at 3.5%, and the average hourly earnings estimated as an upsurge of 0.3% and 4.2%.

In conclusion, the magnitude of the next move for Bitcoin will depend heavily on the nonfarm payrolls data and the Federal Reserve's reaction to it. Should the wage growth and payrolls figure come in above expectations, that would put a bid under the U.S. dollar. On the other hand, a more modest result than anticipated could invalidate the H&S by strengthening the odds that Bitcoin may rally.



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