Cryptocurrency prices drifted lower on Friday as Bitcoin (BTC) slid below support at $29,000 while investors focused their attention on next week’s Consumer Price Index (CPI) report.
Stock were higher in early trading, but fell into the red in the afternoon after the July jobs report showed the U.S. labor market continues to cool, with nonfarm payrolls rising by 187,000 last month while the unemployment rate dipped slightly to 3.5%. Some analysts are concerned that these numbers signal the Fed may continue to raise interest rates as signs begin to emerge that inflation is starting to rise again.
At the closing bell, the S&P, Dow, and Nasdaq finished lower, down 0.53%, 0.43%, and 0.36%, respectively.
Data provided by TradingView shows that Bitcoin’s price held near $29,200 for much of the trading day, but was hit with an afternoon sell-off that dropped it to a daily low of $28,753 before bulls managed to bid it back above $29,000.
“August Bitcoin futures prices [were] slightly lower in early U.S. trading Friday,” according to Kitco senior technical analyst Jim Wyckoff.
Bitcoin futures 1-day chart. Source: Kitco
“Recent price action has negated a price downtrend line on the daily bar chart,” Wyckoff said. “Still, bulls and bears are on a level overall near-term technical playing field at present. That suggests more lackluster, sideways and choppy trading in the near term.”
Market analyst Rekt Capital said that if Bitcoin wants to regain its bullish momentum, “it needs to hold ~$29250 as support.”
“Flipping ~$29250 into resistance would likely enable downside,” Rekt Capital said. “At the moment, BTC has been see-sawing in and around this level for the past few days, undecided on direction.”
Based on past market cycles, Crypto Tony said that Bitcoin will typically see one last shakeout before a significant pump in price, and warned its price could dip 20-30% in Q4 2023.
But according to market analyst Moustache, the long-term outlook remains bullish, and the recent stagnant price action has been a repeating pattern in Bitcoin bull markets going back to 2017.
Altcoins follow Bitcoin’s lead
The majority of altcoins followed Bitcoin’s price lower, with only a dozen or so tokens in the top 200 posting gains on Friday, while the rest recorded losses.
Daily cryptocurrency market performance. Source: Coin360
Helium (HNT) was one of the few exceptions with a price increase of 17.8% to trade at $2.17, while Siacoin (SC) climbed 11% and Centrifuge (CF) gained 6.95%. UniBot (UNIBOT), XDC Network (XDC), and Kyber Network Crystal v2 (KNC), three of the largest gainers in recent days, became the biggest losers on Friday as profit-taking resulted in declines of 14.7%, 13.1%, and 7.19%, respectively.
The overall cryptocurrency market cap now stands at $1.16 trillion, and Bitcoin’s dominance rate is 48.7%.