The upcoming U.S. nonfarm payrolls report could introduce volatility into cryptocurrency markets. Economists predict that job growth in April will significantly decelerate, with payrolls expected to increase by only 62,000 compared to March’s 172,000, while the unemployment rate is anticipated to remain steady at around 4.3%, according to Reuters.
On the surface, a slowdown in hiring might bolster bitcoin and other risk assets. A less robust labor market could support the notion that the Federal Reserve will maintain current interest rates this year, possibly deferring any tightening measures until later. Presently, markets are anticipating steady rates through the current year, followed by an increase next year.
However, the situation is nuanced.
Markets will also scrutinize wage growth closely alongside payrolls data. Average hourly earnings are projected to rise 3.8% year-over-year from the previous 3.5%. Persistent wage pressures, coupled with already high oil prices, might exacerbate global inflation concerns and complicate the Fed’s strategy.
Thus, market reactions may depend less on overall job creation figures and more on whether wage growth moderates. Since traders have already anticipated potential rate hikes next year, a lower-than-expected earnings figure could be necessary for risk assets to rally significantly.
Currently, analysts maintain a generally positive outlook on bitcoin, with the $75,000 level seen as vital support.
“Bitcoin has dipped below $80K, prolonging its pullback from the 200-day moving average after briefly reaching overbought levels near the upper edge of its uptrend channel. The channel’s lower boundary is around $77.5K; however, a significant trend reversal would likely require prices falling below recent lows at approximately $75K,” noted Alex Kuptsikevich, chief market analyst at FxPro.
In addition to payrolls, traders are also monitoring the upcoming minutes from the Fed’s April meeting and developments in the Strait of Hormuz and global oil markets.
“Prediction markets assign a 97% probability that there will be no normalization by May 15. The disparity between this pricing and the equity market’s readiness to ignore each escalation is this week’s key contradiction,” commented QCP Capital, based in Singapore, in their market analysis. “If crude prices do not stabilize before the release of the May 20 FOMC minutes, dismissing a stagflation narrative will become increasingly difficult.”
For more insights into today’s activities in altcoins and derivatives, seeCrypto Markets Today. For an extensive list of this week’s events, refer to CoinDesk’s “Crypto Week Ahead.”
S&P 500 call options volume hits record $2.6 trillion. Here’s what it means for bitcoin(CoinDesk): Record volumes of bullish S&P 500 call options indicate a surge in speculative risk-taking on Wall Street, offering positive signals to crypto as the two are positively correlated.
Trump asserts ceasefire holds despite U.S.-Iran tensions(Reuters): Following clashes in the Gulf and renewed attacks on the UAE by Iran, Trump maintained that a ceasefire was still in effect, even though these events have dampened hopes for a quick resolution to the conflict.
U.S. stocks rise as tech outlook offsets war concerns: market wrap.(Bloomberg): A surge in technology stocks has driven U.S. index futures upward as investors anticipate the monthly jobs report. Oil prices fluctuated, while benchmarks in Europe and Asia declined. Brent crude rose just above $100 a barrel. The dollar is on track for its second consecutive week of losses.
Federal court rules against new global tariffs Trump imposed after Supreme Court loss(AP): A federal court found the 10% global tariffs imposed by Trump illegal following a significant setback at the Supreme Court. The Court of International Trade in New York ruled this way after small businesses filed lawsuits.
The chart from coinglass tracks the Coinbase Bitcoin Premium Index, which assesses the price difference between bitcoin on Coinbase—indicative of U.S. institutional and spot demand—and offshore exchanges like Binance. Green readings suggest BTC is trading at a premium on Coinbase, indicating higher demand among U.S.-based investors.
This week, the premium has turned into a discount as bitcoin attempted to stabilize above $80,000. Notably, this rally has stalled.
Historically, bull runs have coincided with persistent positive readings in the index. Therefore, any subsequent upward movement will likely require a return of the premium.