Bitcoin’s (BTC) Price Recovery Faces Nonfarm Payrolls Test

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Bitcoin’s price sell-off has stalled since Wednesday’s Fed meeting, allowing for a minor price recovery. Further gains hinge, at least partially, on the impending U.S. nonfarm payrolls data.

The U.S. Labor Department’s closely watched nonfarm payrolls report due 12:30 UTC is expected to show the world’s largest economy added 243,000 jobs last month following March’s 303,000 additions, according to Reuters. The unemployment rate is expected to have stayed below 4% for a 27th straight month, while average hourly earnings are forecast to have risen 0.3% month-on-month, matching March’s gain.

Ahead of the data, bitcoin (BTC) is showing signs of stability, while the dollar index is weaker. Fed fund futures are showing renewed expectations for an interest-rate cut or liquidity easing in November.

The leading cryptocurrency by market value traded near $59,000 at press time, up over 4% from Wednesday’s lows near $56,500, according to CoinDesk data. The dollar index, which gauges the greenback’s exchange rate against major fiat currencies, has declined over 1% to 105.20 after Fed Chair Jerome Powell ruled out a rate hike as the next likely move during a press conference after the Federal Open Markets Committee’s decision.

Thus, the impending jobs report could be a pivotal event for markets, testing more optimistic bets on Fed rate cuts, according to ING.

“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,” ING’s strategists said in a note to clients.

“CFTC data shows net-speculative positioning on the dollar versus reported G10 currencies was at 24% of open interest, the highest since June 2019, so the room for a further long squeeze in the dollar remains substantial should U.S. data soften over 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 of the greenback, which single-handedly influences global liquidity conditions.



This article was originally published by a www.coindesk.com

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