Key Points
- Bitcoin’s price remains in a tight range as hash rate drops and bearish divergence emerges.
- Job creation data in the U.S. impacts Bitcoin and altcoins, as rising yields suggest a hawkish Federal Reserve stance.
Bitcoin’s price remained largely unchanged on Saturday, despite a dip in the hash rate and the formation of a bearish divergence, which could potentially lead to a bearish breakout.
Bitcoin (BTC) was priced at $94,296 during the last check, reacting to the recent report from the Bureau of Labor Statistics. The report indicated that the U.S. economy generated over 256,000 jobs and the unemployment rate dropped to 4.1%.
Impact on American Equities
As a consequence of this report, American equities experienced a decline, with the Dow Jones and Nasdaq 100 indices dropping by 697 and 317 points, respectively.
The bond market, as predicted, continued its sell-off, with the 30-year yield increasing to 5.0%. The 10- and 5-year yields climbed to 4.76% and 4.57%, respectively. These rising yields suggest that the market anticipates the Federal Reserve to maintain a hawkish tone, which usually impacts risky assets like Bitcoin and altcoins.
Bitcoin’s Hash Rate and Active Addresses
Data from IntoTheBlock reveals that Bitcoin’s hash rate, a crucial number that measures the speed at which mathematical puzzles in the network are being solved, has decreased in recent days as its price has plateaued.
The hash rate was 750 TH/s on Saturday, Jan. 11, which is lower than the 30-day high of 911.88 TH/s and the 30-day average of 793 TH/s.
Additionally, on-chain data indicates that the number of active Bitcoin addresses has dropped to 775,000 from 900,000 on Monday, hinting that some traders have started to sell. According to SoSoValue, all spot Bitcoin ETFs experienced outflows totaling $572 million over the last two consecutive days.
Bearish Divergence in Bitcoin Price
The daily chart indicates that Bitcoin is at risk of a bearish breakout. It has formed the risky head and shoulders chart pattern, with its neckline at $90,952. This is a commonly recognized bearish pattern in trading.
Bitcoin’s Relative Strength Index and the MACD indicators have formed a bearish divergence pattern, with the MACD’s histograms moving below the zero line.
Consequently, a break below the H&S’s neckline at 90,950 could lead to further downside. The first support of this will be the 200-day moving average at $78,285, followed by $73,985, the highest point in March of the previous year.
On a positive note, as reported earlier in the week, the Bitcoin price is forming a bullish pennant chart pattern on the weekly chart. This pattern will remain valid as long as Bitcoin stays above $90,000.
