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Will Bitcoin break above $30K? New JOLTS data, weaker dollar boost chances

Will Bitcoin break above $30K? New JOLTS data, weaker dollar boost chances

On April 4, the U.S. dollar index (DXY), which measures the greenback’s performance versus the basket of six leading foreign currencies, dropped by 0.5% after demand for workers in the world’s largest economy declined.

BTC price eye breakout with dollar at 2-month lows

Bitcoin (BTC) has grown 3.5% since to around $28,800, continuing its extremely negative correlation with the dollar. The BTC/USD pair now eyes a breakout at $30,000, a psychological resistance level, due to hopes that the greenback will weaken further in 2023.

DXY vs. BTC/USD year-to-date returns and correlation coefficient. Source: TradingView

Meanwhile, the February Job Openings and Labor Turnover Survey (JOLTS) showed that the number of official job vacancies dropped below 10 million for the first time since May 2021.

In other words, while two jobs were available for each unemployed person at some point last year, there are now just 1.67.

U.S. vacancies for each job seeker. Source: Bloomberg

Interestingly, the implicit federal funds rate for January 2024 declined after the latest JOLTS data, in similar fashion amid March’s bank failures.

The rate expectations are now around 4% compared to about 5% before the banking crisis, suggesting the market expects the Federal Reserve to stop, if not reverse, its interest rate hike program.

Implicit federal funds rate drop after JOLTS data. Source: Bloomberg

Worth noting is that the JOLTS readings are backward-looking, meaning the latest data does not include March’s sudden wave of bank failures and well-publicized layoffs at McDonald’s, Walmart, and across the technology companies, including Amazon and Apple.

Thus, the market is likely to see even worse JOLTS data in the next few months. This may also line up with the next Federal Open Market Committee meeting in May, prompting a dovish response, as a Reuter poll of forex strategists anticipates.

Lower rates should pressure the dollar downward and, in turn, Bitcoin higher, as long as their traditionally-inverse price correlation remains. 

Bitcoin price painting bullish continuation pattern

From a technical perspective, Bitcoin price eyes an extended price rally in April as it paints an ascending triangle pattern.

Related: Bitcoin breakout ‘matter of…

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