Bitcoin Soars +3% Driven by Weak US Data

The US labor and manufacturing markets are cooling, fueling speculation about a Fed pivot, but is it enough to sustain BTC's momentum amid bearish technical signals?

The price of Bitcoin (BTC) experienced a notable rally on Tuesday, closing the day up 3.15% to $85,107.42. This bullish momentum comes amid weaker-than-expected US economic data. This renewed investor hopes about possible interest rate cuts by the Federal Reserve (Fed), although short-term technical indicators still suggest caution.

Bitcoin is currently trading very close to the 200-day Exponential Moving Average (EMA200), around $85,500, a crucial technical support / TradingView

Key Economic Data Shakes Markets

The day was marked by the release of two crucial reports in the US:

JOLTs Job Openings Report: Job openings fell to 7.568 million, below the market consensus (7.63 million) and slightly below the revised previous figure (7.62 million). This figure suggests a moderate cooling in labor demand, which could ease wage pressures and, therefore, inflationary concerns, a key factor for the Fed.

ISM Manufacturing PMI: The index fell to 49, retreating from the previous 50.3 and falling below expectations (49.5). Falling below the 50 threshold indicates a contraction in the manufacturing sector. It is breaking a three-month streak of expansion and reinforcing the narrative of an economic slowdown.

This data, interpreted as signs that the US economy may be losing steam, put pressure on the dollar. The US Dollar Index (DXY) lost ground, falling 0.10% on the day, as a less tense labor market and contracting industry could give the Fed room to consider less restrictive monetary policy. A weaker dollar tends to benefit alternative assets such as Bitcoin.

Fed in Focus: When Will the Cuts Come?

While recent data fuels speculation about a possible Fed "pivot" to looser policy, monetary futures markets are showing a more patient outlook. According to the CME FedWatch tool, the probability of a rate cut at the May 2025 meeting is low (only 16.5%). Market consensus is that the first rate cut (to the 400-425 basis point range) would materialize at the June 18, 2025, meeting, with an assigned probability of 63.3%.

This expectation of monetary easing, although projected for mid-year, appears to be partially discounted by risky asset markets such as cryptocurrencies, which are benefiting from the prospect of lower yields on safer assets such as bonds.

Bitcoin Technical Analysis: A Key Battle

Despite Tuesday's rally, Bitcoin's technical analysis presents a mixed picture and calls for caution:

Price vs. Moving Averages: Bitcoin is currently trading very close to the 200-day Exponential Moving Average (EMA200), around $85,500, a crucial technical support. However, it remains below the EMA50, located at $87,900, which acts as immediate resistance. A sustained break above the EMA50 would be a bullish sign, while a failure to break above this level or a fall below the EMA200 could indicate a continuation of the underlying downtrend.

Volume and Flows: Data from CheckonChain reveals that total spot volume ($4.84B) is the lowest since March, suggesting a lack of conviction in the bullish move. Furthermore, the spot CVD (Cumulative Volume Spread) is negative (-$121M), indicating increased selling pressure in the spot market.

Derivatives and Leverage: Contrast the weakness of the spot market with the derivatives market. Open interest in futures ($55.25B) and options ($22.62B) is at recent highs, with call options dominating, indicating strong leverage and bullish speculation.

Institutional and Exchange Flows: Bitcoin ETFs accumulated +$46.6M in the last week, a positive sign. However, a positive net flow to exchanges of +14,192 BTC was recorded, which could signal potential profit-taking or institutional selling.

The key contradiction lies between bullish speculation in derivatives markets and the relative weakness observed in the spot market. This suggests that the current rally may be driven more by leverage than by strong organic accumulation, increasing the risk of volatility.

Cautious Optimism

Bitcoin's recent push above $85,000 reflects market optimism about the possibility of looser monetary policy from the Fed, catalyzed by weak US economic data. However, theConfirmation of a trend reversal will require breaking through key technical resistances such as the 50-EMA ($87,900) with convincing volume. Investors will continue to closely monitor upcoming macroeconomic data and market flows to determine whether this surge is sustainable or merely a short-term speculative reaction. The battle between $85,500 and $88,000 will be crucial in the coming days.

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or other advice. Cryptocurrency investments are highly volatile and carry significant risk. Please conduct your own research and consult with a qualified financial advisor before making any investment decisions.