U.S. Nonfarm Payrolls Awaited as Bitcoin Nears Largest Weekly Loss Since FTX’s Collapse
Amid concerns related to Mt. Gox and its potential impact on Bitcoin, the leading cryptocurrency is heading towards its largest weekly decline since November 2022. However, some analysts are hopeful that Friday’s U.S. jobs report could provide support for Bitcoin.
Bitcoin dipped below $54,000 on Friday after reports surfaced that the defunct exchange Mt. Gox had moved BTC worth $2.6 billion for creditor repayments. However, Mt. Gox later announced that it has begun repayments to its customers, resulting in a muted reaction from Bitcoin. As of now, Bitcoin is down over 13% for the week, marking the most significant single-week percentage decline since FTX’s collapse in 2022.
The upcoming nonfarm payrolls (NFP) report for June, set to be released on Friday, is expected to shed light on the state of the U.S. job market. Economists surveyed by FactSet anticipate a moderation in job additions, with an expected 190,000 jobs added in June compared to May’s figure of 272,000. Additionally, the average hourly earnings growth is forecasted to slow in June, potentially indicating a decline in inflation.
Macro traders are closely monitoring the timing and number of Fed rate cuts, with expectations of more dovish policies potentially strengthening pro-risk assets. If the jobs report reveals weaker-than-expected job growth, it could increase expectations for future rate cuts, potentially bolstering Bitcoin as investors seek alternative assets in anticipation of a looser monetary policy, according to Jag Kooner, head of derivatives at Bitfinex.
However, Kooner also highlighted that the magnitude of Bitcoin inflows will depend on overall market sentiment and demand for risk assets. The sentiment could change if the job market appears more resilient, leading to downward pressure on Bitcoin as the likelihood of near-term rate cuts diminishes.