Bitcoin’s price sell-off has hit a roadblock following Wednesday’s Federal Reserve meeting, with a minor price recovery underway. However, the future gains of the leading cryptocurrency are now hanging in the balance, awaiting the release of the U.S. nonfarm payrolls data.
The U.S. Labor Department is set to unveil its highly anticipated nonfarm payrolls report at 12:30 UTC, with expectations of 243,000 job additions in April following a robust 303,000 in March. The unemployment rate is projected to remain below 4% for the 27th consecutive month, while average hourly earnings are forecasted to rise by 0.3% month-on-month, mirroring March’s increase.
As the market eagerly awaits this crucial data, bitcoin is displaying signs of stability while the dollar index is weakening. Fed fund futures are now indicating a renewed anticipation for an interest-rate cut or liquidity easing in November.
At the time of reporting, bitcoin was trading near $59,000, marking a 4% increase from its recent lows near $56,500. The dollar index, which measures the greenback’s value against major fiat currencies, has dropped by over 1% to 105.20 after Fed Chair Jerome Powell dismissed the possibility of a rate hike during a press conference following the Federal Open Markets Committee’s decision.
The upcoming jobs report is expected to be a significant event for the markets, testing the optimistic outlook on potential Fed rate cuts, according to analysts at ING. They stated, “Our 210k call for payrolls means we do not expect today’s data to dent the bearish dollar momentum as markets may fully price in a cut in September and keep short-term USD rates capped.”
Furthermore, continued weakness in the dollar could prove beneficial for risk assets like bitcoin, as the cryptocurrency often moves inversely to the greenback, which plays a crucial role in global liquidity conditions.
With all eyes on the impending nonfarm payrolls data, the fate of bitcoin and the broader market may be determined by the outcome of this pivotal report.