Bitcoin’s flesh wound, US data

Bitcoin takes a bath

After falling around 9%, some Bitcoin bulls might think today’s pressure was just a flesh wound.  The momentum with Bitcoin swings should make every crypto trader nervous.  Bitcoin was under pressure after US officials announced the seizing of USD2.3 million in cryptocurrency ransom paid by Colonial Pipeline Co.  The US government took over the server where the wallet existed and somehow got the private key for the address that held the majority of the funds.  This uncertainty over how they got their private key is scaring many bad players to exit bitcoin holdings.

Bitcoin extended declines after the IRS Chief called on congress for authority to regulate cryptocurrencies.  Bitcoin is dangerously approaching the USD30,000 level as regulatory fears grow and as retail traders prefer to focus on meme stocks.  Long-term bitcoin bulls are getting nervous as a break of USD30,000 could see a tremendous amount of momentum selling.  Many traders have waited for one more push lower, which could see crypto traders wait for a plunge towards the USD20,000-USD25,000 area.

MicroStrategy remains confident in bitcoin and has boosted their junk bond deal to USD500 million.

US Data

A couple of key readings over the health of small business and a report over job openings confirmed employers are battling a labor supply problem.  The Fed has a ‘help wanted’ problem, as too many people aren’t willing to come to work.  Substantial progress in the labor market recovery no longer seems to be in plain sight.  The Fed’s ultra-accommodative stance is not going away anytime soon and some investors might start to think a taper announcement at Jackson Hole Symposium in August might be premature.

The NFIB Small Business Optimism Index unexpectedly declined in May as owners struggled at record levels trying to fill job vacancies.  The headline index dipped to 99.6 from 99.8, but most traders focused on the 4 point raise over average selling prices to 40%, the highest level since April 1981.

The April JOLTS job openings index surged to a record high of 9.3 million, higher than the 8.2 million consensus estimate and upwardly revised 8.288 million prior reading.  Hires continue to hover at 6.1 million, which means a three million gap exists of jobs that can’t get filled.  The quit rate jumped to a record level of 2.7%, which means people are confident they can get a job if they want one.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya