Bitcoin (BTC) experienced new monthly lows at the start of Wall Street’s trading session on April 3, with US unemployment statistics adding to the strain on risk assets. The BTC/USD 4-hour chart reflected this shift.
Bitcoin’s early gains in April were quickly overshadowed as stock prices tumbled. According to market data, BTC/USD dropped below $82,000 for the first time this month after a brief rise to as high as $88,580 when the US government announced reciprocal trade tariffs. However, this initial enthusiasm faded as the implications of the unexpectedly strong policies became apparent. US equities mirrored this decline, with the S&P 500 recording over a 4% decrease at the time of this report.
A financial analysis noted, “Today’s -3.7% drop positions the S&P 500 for its most significant daily decrease since the lockdowns during the 2020 pandemic.” It continued, “From the after-hours peak at 4:25 PM ET yesterday, the S&P 500 has wiped away nearly $3 trillion in market capitalization.”
Following this, the US reported initial jobless claims that were lower than anticipated, coming in at 219,000 compared to the expected 228,000, according to data from the US Department of Labor. The previous week’s figures were revised slightly higher from 224,000 to 225,000, with the 4-week moving average decreasing by 1,250 to 223,000.
Typically, a stronger labor market correlates with weaker performance in risk assets, suggesting policymakers might maintain tighter financial conditions for an extended period. Despite this, data from market indicators still pointed toward a potential interest-rate cut from the Federal Reserve in the upcoming June meeting.
As recession fears grow, there is a prevailing sentiment that the Federal Reserve may be compelled to reduce rates as soon as next month, according to a market analyst.
Bearish trends for BTC could persist for “3-6 months,” as price movements fell short of expectations and approached the crucial $80,000 support level. A prominent trader likened the market behavior to “stair step up then elevator down” in a recent analysis.
Market commentator Byzantine General noted an increase in short positions among major cryptocurrency pairs, suggesting that the impact of tariffs would perpetuate ongoing challenges. “I foresee a stop hunt below the local lows before a surge to squeeze shorts, followed by more fluctuations that trend downward. The impending tariff responses will likely curb any upside potential,” he shared with followers.
Onchain analytics platform Glassnode provided further concerning insights, revealing that Bitcoin recently formed a “death cross” through the convergence of two midterm moving averages. They indicated, “An onchain parallel to the Death Cross has emerged, showing the 30-day volume-weighted price of BTC slipping below the 180-day average, signaling diminishing momentum.” Historically, this formation has led to bearish trends lasting 3-6 months.
Additionally, Glassnode reported that recent speculative sell-offs have not reached the volume levels typically observed during peak price sell-offs.
Please note, this article does not offer investment advice or recommendations. All investment and trading activities involve risk, and individuals are encouraged to conduct their own due diligence before making decisions.