Bitcoin Breakout Stalls as Fed Hike Odds Decrease

Bitcoin's price has been stuck in the $62,000 to $68,000 range for weeks, but a recent breakout attempt pushed it above $65,000 on August 5. However, the move was short-lived, and the price failed to sustain itself.

The Federal Reserve's (Fed) interest rate hike odds have been decreasing, with the latest reading showing a 57.4% chance of a September hike, down from 80.5% a week earlier. This decrease in hike odds could be beneficial for Bitcoin, as it reduces one of the macro pressures that have capped its price all year.

Friday's July jobs report is expected to provide more clarity on the market's next move. A 'Goldilocks' print - moderate hiring, softer wage growth, stable unemployment, and no sharp upward revisions to prior months - would be ideal for Bitcoin, as it would reduce the case for a September hike.

On the other hand, a hot report with strong wage growth would rebuild the case for a September hike and hurt Bitcoin's setup. A weak report could also carry its own risk, as it may signal a slowing economy.

The oil situation is another factor that could impact Bitcoin's price. A real reopening of the Strait of Hormuz would ease energy inflation, give Treasury yields room to fall, and remove one argument for another Fed hike. However, a collapse in the talks could send oil's war premium right back into the price.

For Bitcoin to break out above $69,000, several pieces need to line up, including moderate job growth on Friday without collapsing, wage growth softening, and September hike odds dropping below 50%. Additionally, Hormuz vessel traffic needs to climb back toward pre-war levels, and the 10-year yield needs to follow FedWatch odds lower.