FameEX Daily Technical Analysis | ADP Shows a Weak U.S. Employment Situation, Causing the Market to Place Low Odds on Rate Hikes in May

The major cryptocurrencies experienced price drops yesterday with fluctuations between -0.58% to -5.00%. XRP dipped 0.58%, showing a relatively strong trend. In contrast, DOGE showed the weakest trend, plunging 5.00%. BTC and ETH, two of the leading cryptocurrencies, fell 1.84% and 0.80%, respectively.

According to the 4-hour trading cycle depicted below, the price has been consolidating between $29,184 and $26,508 since March 20, after failing to break above the $29,000 resistance level. Notably, the market has experienced decreased volatility in recent times. In addition, the MA7, MA25, and MA99 also began to converge, and the volume continued to be sluggish. As such, there seems to be a lack of clear direction in terms of the market trend, with both longs and shorts taking a pause.

Overall, the short-, medium-, and long-term trends stay consolidated. Therefore, it is recommended to keep patient in pursuit of more favorable opportunities and enter into further orders when the trend is clear.

Source: TradingView

During yesterday’s trading session, three major U.S. stock indexes exhibited ups and downs. Only the Dow Jones index edged up 0.24%, showing a relatively strong trend. Instead, the S&P 500 index was down 0.25%. The Nasdaq index was the weakest, falling 1.07%. Meanwhile, two of the leading cryptos, BTC and ETH, fell 1.84% and 0.80%, respectively.

On the data front, the employment data from Automatic Data Processing (ADP) unexpectedly displayed a worsening job market in the United States, indicating a significant drop in business employment for March, with only 145,000 new jobs added. This figure is not only lower than February’s revised number of 261,000 but also falls short of Wall Street’s expectation of 210,000 new jobs. The average monthly hiring in the first quarter is only 175,000 people. According to this report, the labor market is cooling off, which could be a sign of the overall slowdown of the U.S. economy.

U.S. ISM data released Wednesday displayed that the non-manufacturing index in  March fell to 51.2 from 55.1 in February, far away from the market expectation (54.5), the lowest in three months. A sharp drop in the price index of raw materials, a three-year low, indicated that inflation continues to cool.

U.S. Department of Commerce announced Wednesday that the U.S. trade deficit had increased for the third consecutive month in February, with exports falling more than imports and the goods and services trade deficit rising 2.7% to $70.5 billion, the largest in four months and above economists’ median estimate of $68.8 billion.

Given that Wednesday’s data suggested a recession is on the horizon, Wall Street said the Federal Reserve (Fed) must proceed with caution to achieve a soft landing. According to the latest data from CME’s FedWatch tool, the market sees an over 56% chance of the Fed suspending interest rate hikes in May.

Source: Yahoo! finance

Over the past 24 hours, there has been a total of $48.49 million in long liquidations and $50.72 million in short liquidations, resulting in a net short liquidation of $2.23 million. 30,034 traders experienced liquidations in total in the last 24 hours. BTC, ETH, and DOGE displayed liquidations of $24.42 million, $17.62 million, and $8.39 million, respectively, ranking the top 3 cryptos in liquidations.

The Fear & Greed index modestly advanced to 62, over the significant threshold of 50. This suggests that the market has become cautious optimism. However, due to the unclear market trend in consolidation, it is recommended to observe the subsequent trend.

The Bitcoin Ahr999 index slightly fell to 0.80, which is above the support level of 0.45 but below that of 1.2. This shows that the short-term trend becomes strong, but the long-term trend is still a bear market. Therefore, It is not recommended to buy the dip in batches. However, purchasing small amounts through dollar-cost averaging (DCA) may be a viable strategy.

According to the above analysis, although the overall market is not pessimistic, the price trend is not clear. Therefore, we recommend periodically buying with a fixed amount and selling them gradually as the market rises.

Source: Coinglass

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.