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Double top ‘likely’ confirmed — 5 things to know in Bitcoin this week

BTC price weakness shows as Bitcoin analysts debate the likelihood of a return toward $20,000.
Bitcoin (BTC) begins a key macro week…

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6 months ago

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BTC price weakness shows as Bitcoin analysts debate the likelihood of a return toward $20,000.

Bitcoin (BTC) begins a key macro week in a weak place as 2023 BTC action begins to look like a “double top.”

After a disappointing weekly close below $26,000, BTC/USD is struggling to catch a bid amid a return to low volatility.

Analysts, already predicting downside, continue to forecast new local lows, and liquidity conditions are increasingly supporting their argument.

Are there any silver linings on the horizon? One on-chain metric suggests that Bitcoin is “in the midst” of a major shakeout akin to March 2020.

A rebound to “fair value” may also come courtesy of Bitcoin’s relative strength index (RSI), which has almost fully retraced its year-to-date gains to reach its lowest levels since the first week of January.

Cointelegraph takes a look at these topics and more in the weekly rundown of key BTC price triggers.

Weekly close makes BTC price double top a reality

Bitcoin closing out the week below key trendlines was already expected, but the reality may be worse than many care to admit.

That is the conclusion of popular trader and analyst Rekt Capital, who warned that a close below $26,000 would “likely” validate a double top structure on the BTC weekly chart.

This currently takes the form of Bitcoin’s two 2023 local tops, both above $31,000, with a retracement to $26,000 inbetween, data from Cointelegraph Markets Pro and TradingView shows.

BTC price weakness now risks continuation downhill thanks to the latest close.

“Weekly close below ~$26,000 likely confirms the Double Top breakdown,” Rekt Capital wrote in part of an X post.

Further analysis noted that $26,000 had formed support for three weeks running, and that finally deciding its fate was thus significant on weekly timeframes.

With BTC/USD nonetheless seeing its lowest weekly close since March, popular chartist JT told X followers that there was still room for optimism. This, he argued, was in the form of the 200-week exponential moving average (EMA) near $25,600.

“This week candle was a spinning top doji, which is a candle that indicates indecision,” he wrote.

“What’s quite remarkable though is that the past three weekly closes have closed within $400 of each other! Talk about boring and flat price action! The good news is we closed well above our weekly 200EMA ($25.6K).”
BTC/USD 1-week chart with 200EMA. Source: TradingView

Cointelegraph previously covered the significance of the 200-week EMA within the current BTC price environment.

$20,000 futures gap next?

Bitcoin slowly heading lower has refueled a debate over its ability to repeat classic chart behavior.

This focuses on the largest cryptocurrency’s habit of “filling gaps” on CME futures markets, which appear on weekends and holidays.

Here, the difference in price between one week’s close and the next week’s open often forms a magnet for BTC price action in future — but not always immediately.

BTC/USD often “fills” gaps within days or even hours of futures markets resuming, but over time, some have been left behind. A major gap on the radar currently lurks at $20,000.

“That’s the only real CME gap that we have in terms of downside movement from current price levels,” Rekt Capital explained in his latest YouTube update on Sep. 6.

He continued by noting a now-filled gap from June 2022 was now acting as resistance after functioning as support and resistance at various points since its creation.

“This CME gap has been filled multiple times already and it’s been flipped into a new resistance,” he said, noting that the aforementioned double top completing would likewise feed into a return to the $20,000 zone.

Under such circumstances, a potential BTC price range would form, with the $20,000 gap and previously-filled gap functioning as support and resistance, respectively.

BTC/USD chart with CME gaps highlighted (screenshot). Source: Rekt Capital/YouTube

Others, however, were undecided about the probability of such a far-off gap being revisited.

“Bitcoin has a long history with CME futures Gaps. These Gaps tend to get filled sooner or later. But there's no guarantee they will,” popular trader Titan of Crypto argued.

Uploading a chart of historical gaps, he referenced another which is yet to fill, this time below $10,000.

“For some of you who are in crypto for quite some time, you may recall the $9.6k gap from September 2020. Back then everyone was expecting this gap to get filled so they can finally buy Bitcoin again. Guess what? It remains unfilled to this day and many got back in at $20k+, fomoing like crazy,” he wrote.

“There is a gap that is still unfilled at $20k-$21k. Will it get filled? Well everything is possible. Yet until the market structure is broken, it's just wishful thinking.”
BTC/USD annotated chart. Source: Titan of Crypto/X

Liquidity increases at March levels

Also feeding into bearish BTC price predictions is the general state of liquidity on BTC/USD markets.

Liquidity heatmaps are a common feature in crypto trading circles, helping to see where bid and ask concentrations lie and how these are manipulated by their owners.

Currently, a large block of bid liquidity is congregating around $24,000 — as Cointelegraph reported, the lowest such concentration since March.

“A a dip into that liquidity below looks a decent probability,” pseudonymous X user Honeybadger thus predicted, uploading one such heatmap.

In its latest heatmap release for largest-volume global exchange Binance, meanwhile, on-chain monitoring resource Material Indicators continued to flag $24,750 as a key level for bulls to retain.

“Whatever the case, bulls must defend the LL at $24,750 to hang on to any hopium of seeing another pump. Printing a new LL buys a ticket to Bearadise,” part of accompanying commentary stated.

CPI leads “huge” pre-FOMC week

After a quiet start to September, the macroeconomic landscape is returning as a potential source of risk asset volatility.

This week, the United States Consumer Price Index (CPI) August print forms the focus ahead of a key interest rate decision by the Federal Reserve.

“Huge last week before the September Fed meeting,” financial commentary resource The Kobeissi Letter wrote in part of preliminary commentary, noting that “lots of volatility” lies ahead.

Due on Sep. 14, CPI is well known as a volatility catalyst for BTC price action, but recent prints have failed to alter the status quo for long.

Crypto market participants nonetheless include its release in their roadmaps, while the figures are apt to impact market expectations of what the Fed will do to benchmark interest rates.

Its next decision will come on Sep. 20, and according to CME Group’s FedWatch Tool, confidence is high that rates will remain unchanged — a potential boon to risk assets, including crypto.

As of Sep. 11, the odds of a pause in hikes were over 90%.

Fed target rate probabilities chart. Source: CME Group

Back to March 2020

As Cointelegraph reported at the weekend, one on-chain metric is signaling that current BTC price action may be more significant than traders believe.

Related: Bitcoin all-time high in 2025? BTC price idea reveals ‘bull run launch’

UTXOs in Loss, which measures the number of unspent transaction outputs (UTXOs) from on-chain transactions worth less than they were at the time of purchase, are at their highest since March 2020.

As noted by on-chain analytics firm Glassnode, UTXOs in Loss does not measure the amount of BTC in loss, but rather the number of UTXOs involved.

A research update from on-chain analytics platform CryptoQuant nonetheless warned that Bitcoin may be dealing with a “black swan” event similar to that which sent BTC price down 60% over three years ago.

“Given that the current level of the ‘UTXOs in loss’ indicator mirrors that of the Black Swan event between March and April 2020 (due to the Coronavirus), those anticipating another Black Swan event might want to consider whether we are already in the midst of the event they are waiting for,” its author, CryptoQuant contributor Woominkyu, wrote.

Bitcoin UTXOs in Loss chart. Source: CryptoQuant

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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2 days ago

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March 9, 2024

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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Mortgage rates fall as labor market normalizes

Jobless claims show an expanding economy. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

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2 days ago

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March 8, 2024

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Everyone was waiting to see if this week’s jobs report would send mortgage rates higher, which is what happened last month. Instead, the 10-year yield had a muted response after the headline number beat estimates, but we have negative job revisions from previous months. The Federal Reserve’s fear of wage growth spiraling out of control hasn’t materialized for over two years now and the unemployment rate ticked up to 3.9%. For now, we can say the labor market isn’t tight anymore, but it’s also not breaking.

The key labor data line in this expansion is the weekly jobless claims report. Jobless claims show an expanding economy that has not lost jobs yet. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

From the Fed: In the week ended March 2, initial claims for unemployment insurance benefits were flat, at 217,000. The four-week moving average declined slightly by 750, to 212,250


Below is an explanation of how we got here with the labor market, which all started during COVID-19.

1. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.

2. Early in the labor market recovery, when we saw weaker job reports, I doubled and tripled down on my assertion that job openings would get to 10 million in this recovery. Job openings rose as high as to 12 million and are currently over 9 million. Even with the massive miss on a job report in May 2021, I didn’t waver.

Currently, the jobs openings, quit percentage and hires data are below pre-COVID-19 levels, which means the labor market isn’t as tight as it once was, and this is why the employment cost index has been slowing data to move along the quits percentage.  

2-US_Job_Quits_Rate-1-2

3. I wrote that we should get back all the jobs lost to COVID-19 by September of 2022. At the time this would be a speedy labor market recovery, and it happened on schedule, too

Total employment data

4. This is the key one for right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, which would have been in line with the job growth rate in February 2020. Today, we are at 157,808,000. This is important because job growth should be cooling down now. We are more in line with where the labor market should be when averaging 140K-165K monthly. So for now, the fact that we aren’t trending between 140K-165K means we still have a bit more recovery kick left before we get down to those levels. 




From BLS: Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.

Here are the jobs that were created and lost in the previous month:

IMG_5092

In this jobs report, the unemployment rate for education levels looks like this:

  • Less than a high school diploma: 6.1%
  • High school graduate and no college: 4.2%
  • Some college or associate degree: 3.1%
  • Bachelor’s degree or higher: 2.2%
IMG_5093_320f22

Today’s report has continued the trend of the labor data beating my expectations, only because I am looking for the jobs data to slow down to a level of 140K-165K, which hasn’t happened yet. I wouldn’t categorize the labor market as being tight anymore because of the quits ratio and the hires data in the job openings report. This also shows itself in the employment cost index as well. These are key data lines for the Fed and the reason we are going to see three rate cuts this year.

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Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January…

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2 days ago

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March 8, 2024

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Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush. 

What happened? Let's take a closer look.

On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.

Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.

Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K,  a 124K revision, which was the biggest one-month negative revision in two years!

Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.

To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).

And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...

... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...

... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.

While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.

But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).

This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.

There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!

But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!

The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!

Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...

Source: St Louis Fed FRED Native Born and Foreign Born

... but there has been zero job-creation for native born workers since June 2018!

This is a huge issue - especially at a time of an illegal alien flood at the southwest border...

... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.

Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.

Tyler Durden Fri, 03/08/2024 - 13:30

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