Bitcoin Looking to August Non-Farm Payrolls Amid Growing Concerns on Fed Rate Hike
Traders of Bitcoin are curious to see how the NFP report for August will affect the markets and influence the Fed’s expectations for September. The number for August will be released by the Bureau of Labor Statistics on September 4, and with soaring oil prices and all the inflation concerns that surround, more and more people have been focusing on the labor market with the recent hawkish comments from Fed Chair Kevin Warsh.
Bitcoin and August’s Jobs Report
Economists predict that for the month of August, the unemployment rate remained at 4.1%, and 56,000 jobs were added.
Despite some renewed signs of economic growth from June, a 56,000 job added number still presents a striking contrast to the strong labor and employment growth that occurred in the years prior. For this reason, the August NFP report will have a lot of market moving potential.
The labor market also appears to be softening, as some of the payroll revisions have been disappointing. The labor participation rate for July was 61.4%, and average hourly earnings were at 3.2% for the year.
More Concerns with Slowing Job Growth
With the latest release of private sector employment data, there are greater concerns on the slowing of job growth in the U.S.
According to ADP, U.S. employers added only 38,000 private-sector jobs in August, which made them the weakest in seven months.
While some healthy sectors like education and health-related sectors added workers, manufacturing and professional sectors lost jobs.
Should the official NFP report show a similar slowdown, investors may begin to think about the implications of a slower economy for the Federal Reserve’s possible September rate decision.
How NFP Data Could Impact Fed Rate Expectations
Jobs data for August could prove significant, leading up to the Sept. 15-16 FOMC meeting. A payroll number that is above 100,000 and a stable or lower unemployment rate may show that the labor market remained resilient.
For the Fed, such data could support a cautious or hawkish stance in fighting inflation attributable to higher oil prices.
A weak payroll or a rise in the unemployment rate could make the market less worried about higher interest rates in the future. A more hawkish Fed stance may lead the market to become more bearish, but a weakening labor market may support a more dovish Fed Stance and a bullish market.
Such a scenario may have a positive impact on Bitcoin because weaker employment increases liquidity in the market. However, high inflation may have an opposing impact.
Bitcoin Price Eyes $82,700 as Key Resistance Holds
Mentions of Bitcoin at about $76,200 are found in banking Analyst Michaël van de Poppe’s recent Tweets. He shows that Bitcoin is now trading for $77,900.
While the $79,300 zone is still resistive, Van de Poppe says that Bitcoin may bound toward $82,700. For the time being, the support level at $76,200 is likely to hold.
A decisive move above this level could finish the bullish setup formation and unlock the ability to target the $82,700 level.
The level at $76,200 remains an important support zone. Should buyers continue to defend this region, then Bitcoin will likely continue to build on its recovery.
Bitcoin’s sideways trading could also impact other cryptos. Van de Poppe has suggested that Bitcoin’s long sideways trading could allow money to move into altcoins. As such, continued trading range bound between support and resistance levels could drive altcoin traders into highly anticipated altcoins.
As Bitcoin hovers near major levels, the NFP may set the direction for other cryptos and Bitcoin for the rest of this month.
Other bits of data to pay attention to include the August payroll growth, unemployment, wage growth numbers, and revisions to previously reported employment levels. Well below expected job growth could calm inflation concerns and help lift Bitcoin. Conversely, strong employment numbers could mean the Fed favors tightening policy more.
Bitcoin’s trading near major support/resistance gives the NFP a potential high impact on other cryptos and Bitcoin.
