BTC On Watch

Bitcoin is starting the week on a softer footing following the surge higher we saw on Friday. BTC futures recovered off last week’s lows with a more than 5% rally over Friday, also gapping higher at the open this week before softening into the European open today. The rally on Friday came in response to the latest US jobs report which saw the headline NFP confirming a sharp drop in jobs growth. At 139k, the NFP was a little firmer than the 127k forecast, but well down from the prior month’s 177k reading, keeping near-term Fed easing expectations intact. Traders are currently pricing September as the projected point for the Fed to ease next, while any further data softness could see this moving more towards July.

Institutional Buying

With Bitcoin sitting just below the all-time highs, there is plenty of speculation as to whether we’ll see a fresh push higher or a deeper correction lower. Institutional demand has cooled over recent days but across the last month, BTC ETFs have seen record  buying. Michael Saylor’s Strategy fund recently announced a fresh purchase of $75 million BTC now making it the largest global holder of BTC with more than $65 billion in reserve, more than the US and China. Indeed, growing demand from institutions as well as national buyers means that Bitcoin’s available supply I continuing to shrink. Given the finite amount of Bitcoin available, this dynamic is a key driver of the medium to long-term bull forecast for BTC and a crux of the Strategy fund’s investment ethos.

Technical Views

BTC

The correction lower in BTC has stalled into the $100k support and bull channel lows. While this region holds, focus is on a fresh push higher with the bull channel highs around $120k the next upside target. To the downside, $91,750 is the next support to note if we break lower.