The US Job report was released last Friday and it reveals a wearing and tearing economy. Other sectors of the economy have been slowing down in recent months with the exception of the job market. The recent repot however, shows that the job growth has shrink to 211 000 down from 311 000 jobs in the month of February.
As the situation continues to get worse, job cuts are mounting as hiring is losing traction due to uncertainty and the current turmoil being experienced in banking sector. To add insult to injury, the Feds (Federal Government) constant interest rates to curb inflation are worsening the situation as wage growth continues to increase beyond the Feds 2.0% inflation target.
According to the report, it is estimated that the unemployment rate is holding steady at 3.6%, average workweek hours is constant at 34.5 with average earnings creeping up by 0.1 points to 0.3% for the month. Accumulatively, the data brings down the annual average hourly earnings down to 4.3% from 4.6%.
The key question perhaps is, how does the data contained in the report affect Bitcoin prices? Well, traders will be closely scrutinizing the net change in the jobs economy as well as labor market slack measures and wage growth. On Friday the US markets were closed to observe Good Friday and this is important because the crypto market normally responds to reactions n the US Dollar, US yields and the US Stock market. During the closure Bitcoin won’t have those asset classes to monitor and trade off on.
Due to the Easter Holiday closure, liquidity will also be thin leading to unpredictable trading conditions. Due to this factors the market reaction can take several causes including:
A stronger than expected job report will weaken crypto because of the rise in the US Dollar yields and therefore force a rise in the Fed tightening bets and if the report remains inline with expectations, then the market reaction will be neutral.
On the other hand, a weaker than expected jobs report will lead to a stronger crypto market as the US Dollar yields and Fed tightening bets fall.
The data from the market indicates that bitcoin has recently formed a pennant structure and is therefore primed for a breakout from a technical perspective.
Going by the current Bitcoin price, a stronger jobs report could catalyze the fall in Bitcoin’s price to a support-tuned resistance of around $26 500 or even around $25 500.
A weaker report could push Bitcoin’s price above the recent high in the mid $29 000s to above $30 000 or even higher towards the key $32 500 – $33 000 resistance area.
There is always a risk of a weak report hurting Bitcoin due to fears of imminent US recession by crypto holders and that a stronger report would help Bitcoin since holders’ recession fears ease but in the long run, financial conditions and the nitty gritty of what happens with the Fed has more effect to Bitcoin than mere economic growth.
