- Nonfarm Payrolls in the US increased by 517,000, 2.5 times higher than the forecast of 185,000.
- The jobs data came in higher than expectations, which bodes well for the US Dollar, but could trigger a sell-off in risk-on markets like Bitcoin or stock markets.
- With a massive spike in jobs, average hourly earnings came in at expectations, 0.3%.
The United States unemployment rate for January came in at 3.4% which is lower than forecast of 3.6%. The Nonfarm Payrolls (NFP) data shows that 517,000 jobs were added in January, which is much higher than the expected 185,000. The last important component in the jobs sector is the average hourly earnings year-over-year which landed at 4.4% as opposed to the expected 4.9%.
To put it simply, the jobs data is bullish for the US Dollar but a threat to the risk-on markets and the rally it experienced at the Federal Reserve's policy meeting on February 1. Hence, market participants need to exercise cautions as a short-term sell-off in the equities and cryptocurrencies could be around the corner.
If the disinflation, as suggested by the Fed Chairman Jerome Powell continues, the interest rate hikes will remain at 25 basis points or lower, allowing the committee to achieve their highly-anticipated soft landing.
Also read: Bitcoin Weekly Forecast: Nonfarm Payrolls on the radar after Powell’s speech propels BTC higher
Bitcoin price feels the effects of higher NFP print
Bitcoin market participants’ excitement from the US Federal Reserve’s rate hike dovish commentary faded after the release of the US jobs data. Since the NFP showed an addition of 571,000 in January, the bullish outlook seen over the last 24 hours seems to be winding down, which can be seen in BTC’s 4.24% drop.
A stronger jobs report where the actual data exceeds expectations is generally seen as a positive development of economic conditions. Hence, it promotes a strong US Dollar, which in turn results in a sell-off in risk-on assets.
The weekly, three-day and daily charts show a sell-signal or signs of exhaustion. The weekly chart, in particular, shows that BTC is close to tagging the 200-week Simple Moving Average (SMA), which could result in a rejection.
Additionally, the one-day chart also shows the presence of a bearish divergence, which could result in a sell-off with the NFP data acting as a catalyst.
The $23,000 to $18,600 support zone is extremely important for traders should BTC nosedive in the coming hours.
BTC/USDT chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
TRON gains 10% in 2024, supply of stablecoins reaches over $50 billion in Q1
TRON, a blockchain-based digital platform, has seen positive growth in the first quarter of 2024, as seen in a Messari report. TRON noted gains across several metrics like market capitalization, revenue and total value locked.
XRP hovers near $0.50 as Ripple CTO addresses concerns related to stablecoin launch
XRP is hovering near $0.53 on Friday, spending nearly all week below $0.55. Ripple CTO David Schwartz addressed concerns on stablecoin and XRP utility on Thursday.
Terraform Labs set to restrict access for users in the US after recent ruling in SEC lawsuit
Blockchain company Terraform Labs said Thursday that it will restrict access to some of its products and services for US-based users as it expects to receive a court order soon in light of its legal battle against the US Securities and Exchange Commission (SEC).
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s (BTC) recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Bitcoin: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s (BTC) recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.