The upcoming US jobs report is set to significantly impact the cryptocurrency and traditional finance markets. This data will be crucial in determining the Federal Reserve’s interest rate decision later this month.
At present, Bitcoin and other cryptocurrencies, such as Bitcoin (BTC), are in a bear cycle. Recently, for instance, Bitcoin dipped to $55,200 within the last 24 hours, which was the lowest it has been in a month. For a short while, it even fell slightly below $56,000 but then soared above this crucial point of reference. The same goes for all the other altcoins; most altcoins recorded losses in the course of the week, with minor gains.
There have been outflows of Bitcoin ETFs, and the open interest in futures has been on the decline. These trends indicate a decline in optimism about Bitcoin’s short-term prices.
The unemployment data released today is expected to determine the performance of cryptocurrency and the stock markets. This report will show whether the US economy is slowing down to a greater extent or will experience a short-term boost. Recent employment statistics show a rise in employment in the previous month, higher than the market had anticipated, hence the volatility. The monthly data is essential for traders and depends only on the last day of a given month, based on the data obtained in a survey.
Crypto Enthusiasts Eye Federal Reserve’s Moves for Q4 Boost
In July, this figure for unemployment rose to 4.3%, while in April 2023 it was 3.4%. This rise in unemployment has made the Federal Reserve consider changing its interest rate policy after four years. Specifically, Fed Chair Jerome Powell said that the Fed could decrease its benchmark lending rate given current economic indicators.
Based on past trends, interest rates have a bearish effect on crypto assets when high, whereas low interest rates have bullish impacts. For instance, the bull cycle of 2021-2022 was characterized by high crypto performances as rates increased due to COVID-19. However, the fluctuations in interest rates in November 2021 put most of the crypto markets under low liquidity, which only resumed in the second half of 2023.
September has historically been a bad month for cryptos, with negative returns in eight of the past nine years. While Crypto has been slow-moving recently, crypto enthusiasts expect a positive fourth quarter depending on the Federal Reserve’s interest rate and macroeconomic indicators.
