How could NFP benefit Bitcoin price action?

Following the Grayscale victory, the price of bitcoin has significantly declined. The price of the most well-known cryptocurrency is currently $27,300. With the release of the US Core PCE price index data on Thursday and the US NFP on Friday, cryptocurrency markets are anticipated to be volatile.

It is anticipated that 170,000 new jobs were added overall in August as opposed to 187,000 in July. The US Federal Reserve will base its interest rate decisions in September on the US Nonfarm Payrolls (NFP) report for August, which is scheduled to be released on September 1.

Firstly, the dollar is the common denominator in both the Forex and crypto markets, which is one of three possible outcomes for the US NFP data, which will be revealed on September 1 at 12:30 GMT. Therefore, it is important to first comprehend how the NFP event affected the value of the dollar. If NFP comes in hotter than anticipated, it would show that interest rate hikes have not impeded job creation and point to a greater level of economic activity.

Second, the Fed’s preferred inflation indicator is the Core Personal Consumption Expenditure (PCE) price index, which has met the 4.2% annual rate projection. However, it’s unlikely that this incident will have a significant impact this month.


Thirdly, the private sector added 177,000 jobs in August as opposed to the revised July data, which stand at 324,000, which were released by Automatic Data Processing (ADP) on August 30 and fell short of expectations of 195,000.

Fourth, the recent sharp increase in Bitcoin’s correlation to stock market indices shows that any macroeconomic developments that have an impact on the US stock market are likely to have an impact on cryptocurrencies as well.

Lastly, despite the macroeconomic event, a FOMO-driven rally that pushes the price of Bitcoin to $40,000 could be sparked by Grayscale’s triumph over the SEC and impending ETF judgements. If this new investment vehicle is approved, it might cause a FOMO-driven rally that drives the price of bitcoin to $40,000 while ignoring macroeconomic events.

In conclusion, the US NFP may cause the price of bitcoin to experience another surge in volatility, but it is doubtful that this surge will endure for a long enough time for traders to risk taking a directional trade. When the Fed meets on 19-20 September, it is not out of the question that it will either decide to hold interest rates higher for longer or announce another raise of 25 basis points.