Next, keep an eye on three key points of Bitcoin: 92K, 87K, 74K

Bitcoin briefly reached $100,000 earlier this week before quickly falling back as investors reassessed the interest rate outlook for this year and the market became divided on future trends.

Friday's Labor Department report showed that the U.S. added 256,000 jobs, far exceeding expectations of 160,000, and the unemployment rate fell to 4.1% from 4.2% in November. This change in expectations is seen as bearish for risk assets such as Bitcoin. U.S. Treasury yields rose to their highest level since November 2023 and the dollar strengthened, adding to pressure on the crypto market. After the report was released, Bitcoin fell from $95,000 to $92,000.

After the release of the non-farm report, Goldman Sachs expects the Fed to cut interest rates by a total of 50 basis points this year, with 25 basis points cuts at the June and December policy meetings respectively. The previous forecast was 75 basis points.

Notably, on Wednesday the spot bitcoin exchange-traded fund (ETF) recorded its second-largest daily outflow since it began trading in January last year, further indicating that institutional investors are cautious about the cryptocurrency market.

A few positions worth watching: $92,000, $87,000 and $74,000

Since hitting its all-time high (ATH), Bitcoin price has been facing tremendous selling pressure.

Technical charts released by TradingView financial analyst Timothy Smith show that the price of Bitcoin has recently formed a bearish engulfing pattern, and the rally that broke through the $100,000 mark last week has paused. In addition, the relative strength index (RSI) has fallen below the 50 threshold, and the current price has also fallen below the important 50-day moving average (MA), indicating that buying momentum is weakening.

Analysts believe that the first support level to watch is around $92,000. This area is likely to find buying interest around the late November retracement low and December trough, as well as the lower trendline of a potential new descending channel, which also forms support here.

A break below there could lead to a deeper drop to $87,000, which is where on the chart Bitcoin bulls may look for an entry point beneath the flag pattern that previously propelled the cryptocurrency to new all-time highs.

However, if BTC closes below that level, it would open a downtrend towards around $74,000. Long-term investors might consider entering around the 200-day moving average (MA) around that area, as well as notable peaks from March and October. Such a decline would represent a retracement of about 20% from current prices.

The chart provided by Timothy Smith shows that if the bulls regain momentum, another attempt to hit the psychological barrier of $100,000 may be made, and in turn, retest the important $106,000 level. Traders who bought on the recent pullback may lock in profits near this level.

On the other hand, analyst Rekt Capital believes that Bitcoin has seen a bullish divergence at the bottom support level of the range at $91,000, signaling a possible rebound in the coming weeks.

“The strong employment data actually means the bull market could last longer than expected,” Capriole Fund founder Charles Edwards wrote on X.com. “This is the best data in six months and sets the stage for the possibility that unemployment has bottomed out.”

Matt Mena, cryptocurrency research strategist at 21Shares, echoed that optimism, saying a strong labor market, diminished recession fears and bullish policy potential from Donald Trump’s administration create a very favorable environment for Bitcoin’s continued gains.

In the short term, the inflation data (including PPI and CPI) to be released next week will have an important impact on the Fed’s policy expectations and may further influence the trend of risky assets such as Bitcoin.