Overview
• The July NFP report is due today, and the US dollar’s volatility is set to increase.
• Bitcoin holds close to its yearly highs, with the bias for it remaining bullish while the market holds above the rising trendline.
• Today’s NFP report can make or break the trend, as a better-than-expected report could cause Bitcoin to test the trendline while a worse-than-expected report could lead to it reaching its bullish flag target of $35k.
Impact of NFP on Markets
The Non-Farm Payrolls (NFP) report, released on the first Friday of each month, shows the change in number of workers in the US economy – which directly impacts financial markets. This year, since more institutional investors are including Bitcoin in their portfolios, there has been an increased correlation between Bitcoin and the strength or weakness of the dollar. As such, Bitcoin has been holding close to its yearly highs ahead of today’s July NFP report release.
Bullish Bias for Bitcoin
The technical picture favors more upside for Bitcoin for three reasons: 1) Since 2022 lows, there have been higher highs and higher lows; 2) A proper identification of a bullish trend can be made by connecting lower highs; 3) A possible bullish flag indicates a target of $35k for Bitcoin.
What Could Happen?
Depending on how today’s July NFP report turns out, different outcomes are likely: if it is better than expected then dollar will strengthen and cause Bitcoin to test the trendline; if it is worse than expected then it could lead to Bitcoin reaching its bullish flag target of $35k.
Conclusion
Today’s July NFP report will have a direct impact on both traditional financial markets and cryptocurrency markets – particularly with regards to USD strength/weakness affecting bitcoin prices – with different outcomes depending on whether or not expectations are met. It remains to be seen whether bulls will continue buying dips so long as price action is held above rising trendline.