Bitcoin staged a recovery on June 4 after falling sharply earlier in the day, as fresh U.S. labor market data increased expectations that the Federal Reserve may still cut interest rates later this year.
The world’s largest cryptocurrency climbed back to around $63,800 after briefly dropping to an intraday low near $61,550. Although the rebound helped ease some concerns among investors, Bitcoin was still down about 5% over the previous 24 hours and remained nearly 22% below its May high of approximately $82,000.
The recovery came shortly after the U.S. Department of Labor released a new batch of employment figures that suggested the labor market may be showing signs of cooling. Initial jobless claims for the week ending May 30 rose to 225,000, up by 13,000 from the previous week and above economists’ expectations of 215,000. Officials also revised the prior week’s figure higher to 212,000.
At the same time, labor costs grew less than expected during the first quarter. According to government data, final labor costs increased by 1.8%, significantly below the 2.5% forecast from economists. Meanwhile, continuing jobless claims declined by 8,000 to 1.777 million for the week ending May 23.
These figures helped improve sentiment across financial markets, particularly among investors who closely monitor economic indicators for clues about future Federal Reserve policy decisions.
Many market participants believe softer labor market conditions could give the Fed more flexibility to reduce interest rates if economic growth continues to slow. Lower borrowing costs generally increase liquidity in the financial system and often make riskier assets such as cryptocurrencies more attractive compared to traditional fixed-income investments.
As a result, traders increased their expectations that policymakers could move toward monetary easing in the coming months. Historically, Bitcoin and other digital assets have often performed well during periods when markets anticipate lower interest rates.
However, uncertainty surrounding the Federal Reserve’s next steps remains high. Some analysts have cautioned that rising energy prices could make it more difficult for the central bank to begin cutting rates.
Oil prices have recently surged amid growing tensions between the United States and Iran, raising concerns that inflation could remain elevated. If energy costs continue to rise, policymakers may feel pressure to keep monetary conditions restrictive for longer than investors currently expect.
Despite Bitcoin’s latest rebound, technical indicators suggest caution may still be warranted.
On the daily chart, Bitcoin has fallen below the neckline of a bearish rounding-top pattern that formed between April and early June. The breakdown occurred near the $65,000 level, which had previously served as a major support area.
Other technical signals also continue to point toward weakness. The MACD indicator remains below both its signal line and the zero mark, while negative histogram readings suggest bearish momentum is still building.
In addition, Bitcoin remains below the Supertrend indicator, which is currently positioned near $70,500 and continues to generate a sell signal.
Analysts are closely watching the $60,000 level, which has emerged as the next major support zone. A clear move below that area could open the door for a larger decline toward the upper-$40,000 range, based on the projected target of the rounding-top formation.
For now, traders are focused on whether Bitcoin can regain the $65,000 level. A successful move above that former support area could help stabilize market sentiment following one of the steepest cryptocurrency sell-offs seen in recent weeks.
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