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Bitcoin price reached $17,000 for the first time in 2023; What was the cause?

قیمت بیت کوین سطح ۱۷۰۰۰ دلار را پس گرفت

The reports released on Friday morning about the state of the macro economy in the US, especially the unemployment rate report and the payroll report, were not pleasant reports for the stock and crypto markets. But in the meantime, the publication of the ISM report created hope, albeit a small one, to reduce the strict monetary policies of the Federal Reserve and caused the growth of the stock market and bonds, and as a result, the price of Bitcoin. BTC price hit $17,000 for the first time in 2023 on Friday.

According to Mihan Blockchain and quoted by Coin Desk, yesterday’s important economic event was expected to be the report of the Bureau of Labor Statistics (BLS), but the upward rally of all markets and the growth of the price of Bitcoin, after the release of the report ISM non-manufacturing index It happened in December. This index increased from 56.5 to 49.6 in December. If the value of this index is less than 50, it can be said “economic contraction” and since May 2020 (May 1400), this is the first time that the ISM index has reached less than 50. Also, the December report shows that the New Orders Sub-index, which is considered one of the leading indicators, has reached 45.2 from 56, which shows that the economic contraction is more in the service sector. It promises to continue in 2023.

Key BLS labor market numbers for December were better than expected; So that in this month, 223,000 new jobs were created and the unemployment rate reached 3.5%, while the forecasts indicated 200,000 new jobs and an unemployment rate of 3.7%. However, the addition of 223,000 new jobs was a significant decrease from the first half of 2022, when monthly additions typically exceeded 300,000, and the December figure was the lowest number of new jobs. It shows what happened in the month, from April 2021 (April 1400) to today.

In addition, wage increases were lower than expected. Expectations were for a 0.4% increase in wages in December, but it was 0.3%. Compared to last year, wages increased by 4.6%, compared to forecasts of 5%.

Unemployment rate statistics in the United States
US unemployment rate hits 3.5% in December; Source: Trading View

As Blockchain Home readers are aware, in recent months the markets for risky assets (such as stocks and crypto) have reacted positively to bad news about the macro economy, and vice versa. The news of unemployment reduction has a negative effect on the markets, but the reduction of the ISM service index below 50, which indicates economic contraction; This creates the impression that the Federal Reserve’s hand is tied to continue contractionary monetary policies, and the Fed Pivot is the most important event that all markets are waiting for.

After the release of the ISM report, stock and bond prices rose rapidly. The Nasdaq rose more than 3%, and the yield on the 10-year bond fell 0.16% to 3.56%. The Federal Reserve’s interest rate, which has been on the rise for most of 2022, eased slightly in December, rising just 0.5% compared to a 0.75% increase in previous months. Experts predict that the interest rate will increase by only 0.25% at the next economic meeting of the Federal Reserve in February.

Bitcoin price hourly time frame
Bitcoin price hourly time frame; Source: Trading View

Bitcoin’s price gains haven’t been that impressive in the past day, but the cryptocurrency managed to hit $17,000 for the first time in three weeks. Despite the many issues and problems that Bitcoin and the cryptocurrency industry are facing, perhaps the biggest obstacle to the price increase can be considered the strict policies of the Federal Reserve. The uptrend in the cryptocurrency industry may continue as the Federal Reserve tightens. A few days ago, in the short analysis of the price of Bitcoin published in Blockchain Homeland, the possibility of BTC price reaching $17,000 was examined, which you can refer to for more information.

  • What was the main reason for the growth of the price of Bitcoin?

The main cause of price growth was the release of the ISM Non-Manufacturing PMI index for December, which indicates the state of the service sector in the economy. The sharp drop of this index compared to November and reaching below 50 indicates “economic contraction”. The release of this index raised hopes for the Federal Reserve’s withdrawal from its contractionary monetary policies and improved the situation in all markets.

  • Can the price of bitcoin level Fix $17,000?

As shown in last night’s developments, there is very strong selling pressure on the price of Bitcoin at the $17,000 level. Even if this resistance is overcome, there is a stronger resistance at the $17,300 level. Therefore, considering the market conditions, the observed price growth is expected to be temporary.

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