U.S. Initial Jobless claims surged to 6.65 million. This means that when including last week’s figures, more than 10 million people have lost their jobs in just the last fortnight.
This pushes the U.S. unemployment rate up over 6%, a huge jump from the 3.5% figure seen as recently as February.
Forecasts are now showing that the U.S. could see 15% unemployment by the end of Q2.
To give some context to the severity of the unemployment rise, even into the second year of the Great Depression, U.S. unemployment was only at 9%.
1.4 billion USDT was created during the past week. This has been part of a continuation of a recent huge increase in total stable coin value. There has been a record-setting $2.5B increase since the beginning of the year.
Historically, large increases in Tether volumes have coincided with large increases in the price of BTC. This is because it indicates there are large amounts of Tether waiting on the sidelines to re-enter into BTC.
Other reasons that could explain the rapid increase seen in the Tether supply include high demand for Tether from over the counter (OTC) traders in Asia since most Chinese traders are prevented from accessing crypto markets due to government regulations.
Tether also provides a good way for people to move large quantities of USD at low cost around the world, which is attractive at times of great economic volatility such as we are experiencing at the moment.
A final reason could be that large numbers of people are converting some of their BTC and other crypto portfolios to USDT to hedge positions and reduce risk exposure.
A series of class-action lawsuits have been launched in the U.S. against 11 of crypto’s largest projects. The suits against Binance, Civic, BProtocol, Status, Block.one, KayDex, Quantstamp, BiBox, TRON Foundation, KuCoin, and HDR Global Trading (which operates the BitMex exchange) have included many of the industries most notable individuals such as Brendan Blumer, Dan Larimer, Vinny Lingham, and Changpeng Zhao.
Plan B’s Stock to Flow model continues to show that the BTC price is still very close to the centre of the expected range. As we move closer to the halvening, which will occur in less than 40 days, the Stock to Flow model indicates that we could be close to seeing some explosive movement in the BTC price to the upside in the near future.
Bitcoin Technical Analysis
The weekly BTC close occurred right at resistance around 6780. The price has remained within a bear flag formation, with a breakdown of the support line indicating a drop to around the 3K level.
A more bullish interpretation can be found in an ascending triangle pattern, with resistance around the 6900 level.
There is also the possibility that the price may break out of the ascending triangle but still remain within the bear flag formation.
As we are still within a broader decline and it usually pays to be bearish at resistance and bullish at support, the overall weekly bias is bearish. While there have been some notable increase in market sentiment, especially at the opening of the Australian and Asian markets, the recent U.S. job figures and likely huge U.S. COVID-19 death toll this week provide plenty of reason to be bearish on markets.
Consolidation above the 7400 level would invalidate the bearish case, and allow for a continued push to the upside.