Bitcoin and Altcoins Under Pressure After Strong ADP Report

Bitcoin and other major altcoins, such as Ethereum, Solana, and Binance Coin, remained under pressure on Wednesday following the release of a stronger-than-expected private payrolls report by ADP. The report showed that the US economy added 183,000 jobs in January, surpassing December’s 176,000 and exceeding the forecast of 148,000.

The ADP report comes just two days ahead of the Bureau of Labor Statistics’ official nonfarm payrolls report, which is expected to show that the US economy created 154,000 jobs in January, down from 256,000 the previous month. US employment data is closely watched by cryptocurrency and stock market investors because it plays a key role in the Federal Reserve’s dual mandate – maintaining stable inflation and ensuring maximum employment.

Impact on Interest Rates and Cryptocurrency Market

A strong labor market suggests that the Fed may keep interest rates higher for longer, as inflation remains above the 2% target. While the central bank has signaled two rate cuts this year, robust job growth could delay this timeline. This has put pressure on Bitcoin and other altcoins, which are also reacting to ongoing US-China trade negotiations.

However, the US has already paused tariffs on Mexico and Canada, helping to halt Monday’s sell-off in the crypto industry. This development has provided some relief to the market, but the overall sentiment remains cautious.

Bitcoin Price Technicals Point to Potential Gains

Despite the current pressure, Bitcoin’s price technicals point to a potential surge, which could drive other altcoins higher. The weekly chart shows that Bitcoin formed a cup-and-handle pattern, which it completed in November, making a strong bullish breakout and reaching a record high of $109,200.

Currently, Bitcoin is forming a bullish flag chart pattern, comprising a long vertical line and a rectangular consolidation. It has also remained slightly above the 50-day moving average and the ascending trendline that connects the lowest swings since October 2023.

If Bitcoin breaks above the upper boundary of the bullish flag pattern, it could trigger a strong rally, potentially pushing the price toward $120,000. Given Bitcoin’s influence on the broader crypto market, many altcoins would likely follow suit.

Key takeaways:

  • A strong labor market may lead to higher interest rates for longer, putting pressure on Bitcoin and altcoins.
  • Ongoing US-China trade negotiations are also impacting the crypto market.
  • Bitcoin’s price technicals point to a potential surge, which could drive other altcoins higher.
  • A break above the bullish flag pattern could trigger a strong rally, potentially pushing the price toward $120,000.

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