Bitcoin Continues to Tread Water as Traders Await US Labor Market Data
Bitcoin is trading sideways ahead of Friday's release of U.S. labor market data, which is seen as key to determining the Federal Reserve's monetary policy.
The Bitcoin exchange rate has not shown any significant changes over the past 24 hours, stabilizing at around $111,100 after recovering from morning losses.
Market expectations are being shaped by Goldman Sachs' forecast for weaker nonfarm payrolls. Analysts expect payrolls to increase by 60,000, below the 75,000 forecast, and the unemployment rate could reach 4.3%, the highest since 2021.
As Sean Young, chief analyst at MEXC Research, noted in a commentary for Decrypt, the current market stance is described as “soft but resilient,” which supports the likelihood of a 25 basis point rate cut at the Fed’s September 17 meeting.
“Unless we see an unexpectedly strong rebound in jobs and wages, the Fed will likely continue to ease monetary policy,” he said.
Young added that markets have largely priced in employment expectations, but the path beyond September remains less clear. Traders are cautiously watching for any changes in wages or the unemployment rate, which could affect expectations about the pace and depth of layoffs to come, he said.
Against this backdrop, the Fed faces the difficult task of fulfilling its dual mandate of ensuring price stability with core inflation at 3.1% and maintaining maximum employment. The Challenger report for August showed that U.S. employers reported cutting 85,979 jobs, up 39% from July and the most since 2020.
According to Yang, a report showing moderate job growth, stable unemployment, and muted wage growth could boost risk appetite, which would be good for stocks and cryptocurrency markets. Weak data could trigger an initial risk-off on growth concerns, followed by a recovery on expectations of faster Fed easing. Strong data, however, could push yields higher and the dollar stronger, putting pressure on risk assets.
Source: cryptonews.net
