Bitcoin’s Price Recovery Faces Nonfarm Payrolls Test

While the dollar index fell, BTC showed little change and maintained its downward momentum after the Fed.

The US NFP report is expected to show that the pace of job creation slowed in March.

Bitcoin’s price sell-off has stalled since Wednesday’s Fed meeting, allowing for a small rebound in prices. Other gains are at least partly due to upcoming U.S. nonfarm payrolls data.

The U.S. Labor Department’s closely watched nonfarm payrolls report at 12:30 UTC is expected to show the world’s largest economy added 243,000 jobs last month, following 303,000 in March, according to Reuters. The unemployment rate is expected to remain below 4% for the 27th consecutive month, while average hourly earnings are expected to increase by 0.3% monthly, in line with the increase in March.

Ahead of the data, Bitcoin {{BTC}} is showing signs of stabilization while the dollar index is weakening. Fed funds futures show renewed expectations for a rate cut or liquidity easing in November.

According to CoinDesk data, the leading cryptocurrency by market cap was trading near $59,000 at press time; It’s up more than 4% from Wednesday’s low of $56,500, according to CoinDesk data. The dollar index, which measures the dollar’s exchange rate against major fiat currencies, fell over 1% to 105.20 after Fed Chairman Jerome Powell ruled out a rate hike as the next possible move at a press conference following the Federal Open Markets Committee’s decision. .

Therefore, the upcoming jobs report could be a pivotal event for markets and could test more optimistic bets on Fed rate cuts, according to ING.

“Our 210k payroll call means we do not expect today’s data to hurt downside dollar momentum as markets may fully price a cut in September and keep short-term USD rates at bay,” ING strategists wrote in a note to clients. said.

CFTC data shows net speculative positioning on the dollar against reported G10 currencies stands at 24% of open interest; this is the highest level since June 2019; “Therefore, there remains significant room for a longer squeeze in the dollar should US data soften in the coming weeks,” the strategists added.

Continued weakness in the dollar could bode well for risk assets, including Bitcoin. The cryptocurrency tends to move more or less in the opposite direction to the dollar, which in itself affects global liquidity conditions.