Choppy Bitcoin Price Action Continues Ahead of Friday’s Jobs Report

The price of bitcoin (BTC) struggled to break above $66,000 during U.S. trading hours on Wednesday, as two modest rallies were quickly met with selling pressure. At $65,800 at press time, bitcoin remained flat over the past 24 hours. The broader CoinDesk 20 Index also saw a 0.7% decline, dragged down by 10% drops in bitcoin cash (BCH) and litecoin (LTC).

Bitcoin experienced two rallies towards the $66,500 level on Wednesday. The first rally followed a softer than expected report on March growth in the U.S. service industry, while the second rally came after Federal Reserve Chairman Jerome Powell reiterated his expectation for rate cuts this year despite signs of inflation and economic strength.

The majority of bitcoin’s rally in 2024 occurred between mid-February and mid-March, driven by spot ETFs adding significant amounts of bitcoin daily. However, recent data shows that while Grayscale’s GBTC has been selling bitcoin, purchases into other ETFs have slowed, leading to negative net flows into the spot ETF group.

The price of bitcoin has dipped approximately 10% from its record high of nearly $73,500 on March 12. Macro factors, such as inflation rising to 3.2% year-over-year in February and strong economic growth with consistent job additions, have dampened hopes for easier monetary policy from the Fed.

Recent strong economic data, including ADP reporting private payroll growth of 184,000 in March, has pushed the U.S. 10-year Treasury yield to a 2024 high of 4.43% and strengthened the U.S. dollar to its highest level since November. These factors could potentially weigh on risk asset prices, including bitcoin.

Overall, the choppy price action of bitcoin continues as investors await Friday’s Nonfarm Payrolls report, with economists expecting 200,000 job additions. The uncertainty surrounding monetary policy and economic indicators will likely continue to influence the price movements of bitcoin in the near future.