Bitcoin is currently going through its biggest weekly fall in recent memory.
Bitcoin (BTC) is currently experiencing what might be its lowest fall in a week since the collapse of FTX in November 2022. However, market participants are keeping their hopes alive that the upcoming US nonfarm payrolls (NFP) report could bring some ease to the already tense market.
The number one cryptocurrency by market cap slipped below the $54,000 mark early Friday, having shed over 13% of its value through the week. This fall has been linked to reports that the defunct exchange Mt. Gox had moved $2.6 billion worth of BTC for the purpose of repaying creditors. Following Mt. Gox’s confirmation that it has truly started customer repayments, Bitcoin has remained in the red zone.
As seen on TradingView, the 13% decline for the week means that it’s Bitcoin’s biggest single-week percentage decline in nearly two years.
NFP Report Expected to Impact Bitcoin
The US Bureau of Labour Statistics is set to release the NFP report for June on Friday at 12:30 UTC (08:00 EDT). Economists surveyed by FactSet predict that the NFP data will reveal that the economy added 190,000 jobs in June. While this is a notable decrease from May’s 272,000 job additions, the US was able to keep the unemployment rate at 4%.
Furthermore, there are some positives coming out from the inflation side. The average hourly earnings growth is forecasted to slow to 0.3% in June from 0.4% in May, translating to a 3.9% year-on-year increase, down from May’s 4.1%. In simple terms, this could mean that inflation is gradually easing up, which ultimately could potentially influence Federal Reserve policy decisions.
Jag Kooner, head of derivatives at the crypto exchange Bitfinex, believes that Friday’s NFP report could sway the market in major ways. Kooner’s part statement in this regard reads:
“If the NFP report shows weaker-than-expected job growth, it could increase expectations for future rate cuts, which might bolster Bitcoin prices as investors seek alternative assets in anticipation of a looser monetary policy.”
In his explanation, Kooner noted that at the moment, macro traders and institutions have taken a liking to spot Bitcoin ETFs listed in the US, hence the huge amount of inflow these funds have registered since inception.
However, he added that these inflows could accelerate if market participants believe economic uncertainty will drive the Federal Reserve towards eventual rate cuts. Kooner noted this but also cautioned that the extent of the inflows would be influenced by investors’ appetite for risk assets.
What Next?
It is now no gainsaying that Bitcoin is currently going through its biggest weekly fall in recent memory. However, all eyes are on the forthcoming NFP report. A weaker-than-expected jobs figure could ease all the apprehension that has beclouded the market, offering a glimmer of hope for BTC prices. On the other hand, a resilient labor market might make Bitcoin’s current downward trend even worse. That is, as the prospect of immediate rate cuts becomes less likely.
Either way, the crypto market awaits Friday’s data release with the anxiety that the report could stabilize or totally reverse Bitcoin’s recent slide.
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