The non-farm payroll (NFP) data from the U.S. is an important economic indicator that affects many financial markets, including the cryptocurrency market. Here are some key points that may determine the cryptocurrency market's reaction to this data:
Impact on Fed policy:
If the actual data turns out worse than expected (that is, if fewer than 153 thousand new jobs are created), it may signal an economic slowdown, which could prompt the Federal Reserve (Fed) to adopt a softer monetary policy, such as lowering interest rates or raising them more slowly. In such a case, cryptocurrencies, including Bitcoin, may be perceived as protective assets against inflation, which could lead to an increase in their prices.
On the contrary, if the data exceeds expectations, it may confirm the strength of the economy, which could strengthen the dollar and lead to a more aggressive Fed policy. This could create downward pressure on cryptocurrencies, as investors may switch to more traditional assets or expect higher yields from bonds.
Market reaction to expectations and facts:
The market is already pricing in expectations, so if the data turns out significantly worse or better than expected, it may cause sharp fluctuations in the cryptocurrency market. Low employment figures may lead to a rise in Bitcoin, as this could be perceived as a signal for further dollar weakening.
However, if the data turns out to be too strong, it may cause disappointment among those expecting a policy easing, which could lead to selling of cryptocurrency assets.
Volatility and speculation:
Regardless of the outcome, NFP data often triggers increased volatility in the markets, as investors and traders react to new economic realities. This effect may be particularly pronounced in the cryptocurrency market, which is known for its high volatility.
Forecasts:
If the employment data comes in below expectations, a short-term increase in the price of Bitcoin can be expected, as the market may interpret this as a signal for lowering interest rates or other measures to stimulate the economy.
In the event that the data exceeds expectations, the price of Bitcoin may fall due to a strengthening dollar and changing expectations regarding Fed policy.
It's important to remember that the cryptocurrency market is subject to many other factors, including investor sentiment, news about regulation, technological updates, and global economic events. Therefore, employment data is just one of many factors influencing cryptocurrency price movements.