Bitcoin
Bitcoin (BTC) Price Recovery Faces Nonfarm Payrolls Test
The Bitcoin price sell-off has stalled since Wednesday’s Fed meeting, allowing for a small price recovery. Other gains depend at least partially on imminent U.S. nonfarm payrolls data.
The US Department of Labor’s closely watched nonfarm payrolls report, due at 12:30 UTC, is expected to show that the world’s largest economy added 243,000 jobs last month, following March’s 303,000 additions. according to Reuters. The unemployment rate is expected to have remained below 4% for the 27th consecutive month, while average hourly earnings are expected to have increased 0.3% month-on-month, matching March’s gain.
Ahead of data, bitcoin (BTC) is showing signs of stability, while the dollar index is weaker. Fed Funds Futures are showing renewed expectations of a cut in interest rates or easing of liquidity in November.
The leading cryptocurrency by market cap has traded near $59,000 at press time, up more than 4% from Wednesday’s lows near $56,500, according to data from CoinDesk. The dollar index, which measures the dollar’s exchange rate against major fiat currencies, fell more than 1% to 105.20 after Fed Chairman Jerome Powell discarded a rate hike as the likely next move during a press conference following the Federal Open Markets Committee decision.
Thus, the imminent jobs report could be a crucial event for markets, testing more optimistic bets on Fed rate cuts, according to ING.
“Our 210k order for payrolls means we do not expect today’s data to undermine bearish dollar momentum, as markets may fully price in a cut in September and keep short-term dollar rates capped,” ING strategists said in a note to clients.
“CFTC data shows that net speculative positioning on the dollar relative to reported G10 currencies was at 24% of open interest, the highest since June 2019, so room for further prolonged dollar compression remains substantial should US data decline in the coming weeks,” the strategists added.
The dollar’s continued weakness could bode well for risk assets, including bitcoin. Cryptocurrency tends to move more or less in the opposite direction of the dollar, which itself influences global liquidity conditions.