Bitcoin Holds $100K (For Now) as ADP Beats Expectations

Bitcoin Key Points

• Today’s better-than-expected economic data from the UK and US has stabilized risk appetite.
• There are early signs of a potential thaw between Democrats and Republicans on Capitol Hill over the US government shutdown.
• Bitcoin has bounced back to above $103K, roughly halfway between previous-support-turned-resistance at $108K and psychological support at $100K.

In the wake of yesterday’s “big” risk-off move, market sentiment was as brittle than we’ve seen in months, but today’s better-than-expected economic data, along with early signs of progress toward a reopening of the US government, has stabilized major markets.

Starting in the European session, the final UK PMI survey was solid at 52.2 vs. 51.1 expected. As the sun raced across the Atlantic, we got another decent reading from the ADP Employment report at 42K new jobs vs. 25K expected. While still below the 100K+ readings that we were getting at the start of the year, policymakers believe this is near the breakeven level that will prevent the unemployment rate from deteriorating given current immigration dynamics.

Speaking of the unemployment rate, we haven’t gotten official employment data from the world’s largest economy since early September, and it looks unlikely that the October Non-Farm Payrolls (NFP) report will be released this Friday either. That said, there are early signs of a potential thaw between Democrats and Republicans on Capitol Hill. Senate minority leader Schumer and House minority leader Jefferies sent an open letter to President Trump requesting a meeting to end the shutdown, raising hopes of a solution by mid-month:

Make no mistake, today’s developments are far from a “return to normal” for the US economy, but with the jobs market hanging in and policymakers seemingly moving the right direction, traders are undoubtedly less pessimistic than they were earlier this week.

Bitcoin Technical Analysis: BTC/USD Daily Chart

Source: StoneX, TradingView

That optimism has supported assets across the risk curve, with the clearest impact on Bitcoin. The cryptocurrency was trading down by more than -10% at one point this week to trade below $100K, testing its lowest level since May. Bitcoin has since bounced back to above $103K as of writing, roughly halfway between previous-support-turned-resistance at $108K and the aforementioned psychological support level at $100K.

From a short-term perspective, today’s price action represents a stabilization after a big selloff to start the week, no more or less. As long as Bitcoin holds in the $100K-$108K range, the near-term bias remains neutral at best…but after a brutal start to the week, crypto traders will take what they can get. Moving forward, traders will watch for a likely “death cross” of the 50-day EMA below the 200-day MA to signal a possible change in the long-term trend, with a price action break below $100K opening the door for another leg lower from here.

-- Written by Matt Weller, Global Head of Research

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