What Friday's high-profile US jobs report means for Bitcoin price
- The Department of Labor is set to release the March payrolls report on Friday.
- Bitcoin’s price depends on economic numbers more than crypto signals, analysts say.
Forget the next Bitcoin halving event or institutional flows.
For now, Friday’s payrolls report scheduled to be released by the Department of Labor matters more for Bitcoin’s price than any crypto signals, according to Nicolai Søndergaard, research analyst at Nansen.
If the numbers come in strong, crypto prices will fall because the interest rate expectations rise. But if the data is weaker, crypto has more room to go up since the Fed is more likely to inject more money into the financial system, Søndergaard said in a note shared with DL News.
His call comes as Bitcoin has stayed tightly rangebound between $65,000 to $70,000 for much of March, even as other assets like stocks and gold have suffered big declines. The precious metal — often compared with Bitcoin as a store of value — is down 9% this month.
Economist Ed Yardeni also highlighted the importance of this Friday’s big data release in the context of February’s bad news where payroll growth showed signs of losing momentum.
“The March payrolls report [on Friday] will take on added significance following February’s unexpected decline of 92,000 and the rise in the unemployment rate to 4.4%,” Yardeni wrote.
Economic woes
A weak economy means people are more concerned about day-to-day living costs — and thus less willing to invest in assets that are seen as highly risky like Bitcoin.
Earlier in March, Federal Reserve chair Jerome Powell described the labour market as sitting in a “zero-employment growth equilibrium” with a “feel of downside risk.”
At the same time, policymakers expect higher inflation and investors only see a single rate cut this year, the CME FedWatch tool shows. The Fed’s benchmark rate remains in the 3.50% to 3.75% range for now.
Yet rising inflation expectations stemming from higher wartime energy prices and softening job metrics place the US central bank in a narrow corridor.
Tuesday’s JOLTs report, another economic indicator, revealed that job vacancies dropped around 5% between January and February, reaching pandemic level lows. Fewer workers are also quitting, pointing to a cooling and increasingly stagnant labour market, it showed.
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip?
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