Bitcoin Holds $27,000 Ahead Of US May Employment Report

Key Points:

• Bitcoin is relatively stable when the May Nonfarm Payrolls are released.
• The US job creation surged in May, while the unemployment rate rose to a seven-month high of 3.7%.
• Some experts and Fed officials have recently indicated that there is no need to hike interest rates at the June meeting.

The price of Bitcoin fell after a mixed US Nonfarm Payrolls data for May.

According to a Friday morning report from the Bureau of Labor Statistics (BLS), the US economy gained 339,000 jobs in May. This is up from an upwardly revised 294,000 jobs in April and much above analyst predictions of 195,000. The first estimate for April employment growth was 253,000.

Although a strong job creation print normally does not speak well for Bitcoin in the near term, slower wage growth may make a difference and suggest a recovery ahead.

The unemployment rate increased to 3.7% in May, up from 3.4% in April and above the 3.5% forecast. The number of jobs created significantly above market estimates, as it did in April, but a slowdown in annual pay growth supports a negative thesis for the US Dollar index as it speaks to moderating inflation pressures.

Wage growth slowed this month, which could provide some relief to Fed policymakers struggling to return inflation to the US central bank’s 2% objective.

Sharply higher rates, on the other hand, have scarcely affected the solid labor market, providing the Fed with at least one justification to continue tightening monetary policy. Notwithstanding weakening in the interest-rate-sensitive manufacturing sector and the housing market, the widely anticipated employment data provided fresh indications that the economy was far from entering a feared recession.

In this environment, the amount of uncertainty around an interest rate rise or pause at the forthcoming Federal Open Market Committee (FOMC) meeting is expected to have grown as a result of the employment data. As a result, the cryptocurrency market may see severe volatility in the next few days. Some experts and Fed officials have recently indicated that there is no need to hike interest rates at the June meeting.

Today, just 25% of respondents in the CME FedWatch Tool believe a rate rise will occur at the June meeting. Yet, the implications of the employment data and the aftermath of the debt limit agreement provide room for a momentum change in market opinion, making it a compelling case for Bitcoin price to climb, at least after the Fed decision.

At the time of writing, BTC is trading at $27,000.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.

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Harold

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