U.S. Labor Market Shows Resilience
The U.S. labor market remained robust in August, providing a brief sense of relief for investors amid broader economic uncertainty. According to the Labor Department, employers added 315,000 jobs last month, slightly above expectations, while the unemployment rate rose to 3.7%.
The data suggested continued strength in employment, even as inflation and recession concerns linger. Markets reacted positively, with both Bitcoin and Ethereum posting small but notable gains following the report.
Bitcoin and Ethereum Prices Edge Higher
Bitcoin rose around 2% after the announcement, while Ethereum climbed roughly 5%. The gains reflected improved sentiment among investors who saw the labor data as a sign of stability in the U.S. economy.
Still, despite this short-term boost, both cryptocurrencies remain in a long-term bearish posture. Analysts warn that technical patterns may signal further downside if key resistance levels fail to hold.
Bitcoin Faces Technical Resistance
Bitcoin’s recent movement suggests it may have broken out of a bear flag pattern on August 26 — a structure that typically precedes a continuation of downward momentum. If this pattern holds true, Bitcoin could face a potential 44% correction toward the $11,850 level.
However, before any deeper decline, the cryptocurrency may experience a temporary rebound. A decisive close above the 10-day moving average near $20,340 could propel BTC toward the 50-day moving average around $22,000.
Ethereum Shows Short-Term Strength
Ethereum followed Bitcoin’s lead but demonstrated stronger momentum, posting a 5% intraday gain. Despite this rise, ETH remains below critical technical levels that would signal a lasting reversal.
If Ethereum sustains movement above its 50-day moving average, it could regain upward traction. Until then, analysts remain cautious, viewing recent price action as a short-term bounce within a broader downtrend.
Market Outlook
While Friday’s labor data buoyed investor sentiment, the broader macroeconomic picture — including inflation, interest rates, and Federal Reserve policy — continues to weigh heavily on risk assets like Bitcoin and Ethereum.
Unless clear signs of cooling inflation or a dovish shift in monetary policy emerge, crypto markets may struggle to sustain long-term rallies.
Ethereum also appears to be developing a bearish technical formation on its daily chart. ETH could be forming the right shoulder of a head-and-shoulders pattern. A rejection from the 50-day moving average at $1,650 could increase the odds of a steeper correction in the near future.
If this were to happen and Ethereum dips below the $1,430 support level, a 30% correction to $1,000 becomes a strong possibility. For ETH to advance higher, it must slice through the 50-day moving average to invalidate this bearish thesis. Doing so could induce a surge toward its 200-day moving average at $2,100.
Given Bitcoin and Ethereum’s ambiguity, it is imperative to wait for a decisive close above support or below resistance before trying to time their next major price movements.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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