Bitcoin eyes volatility as key US economic data emerges

This week is filled with US economic data that could impact the wallets of cryptocurrency market participants. From jobs data to Federal Reserve policymakers’ insights and sentiment reports, the market may be poised for a week full of volatility.

Meanwhile, Bitcoin (BTC) remains below the $100,000 level. While there is potential for further gains, traders and investors should remain open to reviewing their trading and investing strategies around this macroeconomic data.

The cryptocurrency market is preparing for five US economic data

The following US macroeconomic data could be inspiring Volatility In the cryptocurrency market this week.

Recruitment at ADP

The ADP National Employment Report, which tracks nonfarm private sector employment in the United States, will be released on Wednesday. Based on payroll data from 400,000 US companies, job growth in December is expected to reach 130,000, down from 146,000 in November.

In November, ADP data showed year-over-year wage growth for employed workers increased for the first time in more than two years. A higher-than-expected reading for December would indicate a stronger labor market, which could boost economic growth US dollar.

Strong employment data may also have an impact Bitcoin And cryptocurrencies. Positive jobs numbers can improve consumer confidence, leading to more spending and investment, including in Bitcoin. Some investors may look at Bitcoin as a hedge Economic inflation.

However, strong jobs data could prompt the Fed to raise interest rates to prevent economic overheating. Rising interest rates make non-yielding assets like Bitcoin less attractive, which could prompt investors to shift to traditional assets.

Minutes of the Federal Open Market Committee meeting

Markets will also await the minutes of the Federal Open Market Committee (FOMC) meeting on Wednesday, as it is one of the most important US economic data this week. It will include minutes of the Fed’s December 17-18 meeting, with speakers including Thomas Barkin, Jeffrey Schmid, and Patrick Harker.

What Fed policymakers have to say could help markets gauge the Fed’s interest rate expectations. Indeed, the Fed did just that He pointed to smaller interest rate cuts This year in the face of steady inflation and a resilient economy.

“Globally, the minutes of the December FOMC meeting will dominate the discussions, as the Fed’s dovish tone for 2025, with only two rate cuts expected, reflects a shift from previous optimism. This, along with Trump’s policy announcements, It can keep markets alert Notice.

Initial unemployment claims

On Thursday, the weekly unemployment claims report will provide further insight into the US labor market. In the week ending January 3, initial unemployment claims fell to 211,000, the lowest level in eight months. This marked a post-Christmas decline in unemployment rates and capped a year of lower layoffs, reflecting the US economy’s recent resilience.

Jobless claims have fallen steadily in recent weeks, after their highest levels in more than a year in October. While initial claims are declining, continuing claims are rising. This suggests that employers are holding on to workers, but those who lose their jobs face challenges finding new ones.

Amid slow hiring and layoff dynamics, the general feeling is that this trend could continue into early 2025. That’s until companies figure out how to… Policies of President-elect Donald Trump It will affect the economy.

Lower weekly unemployment claims typically indicate a stronger labor market and greater economic stability. Lower claims indicate that more people are working and earning income. This optimistic outlook could boost investor confidence, which could lead to increased interest in assets like Bitcoin.

Consumer sentiment

The US Consumer Confidence Index, specifically the preliminary report from the University of Michigan, reflects consumers’ overall confidence and optimism regarding the economy. A positive reading on Friday could increase optimism in financial markets, including the cryptocurrency market. This could lead to higher demand for Bitcoin as investors look for assets with growth potential.

Likewise, if consumer confidence is strong, it may indicate that consumers are more willing to spend and take risks. This positive outlook could translate into increased risk appetite among investors, which could lead them to allocate more money to cryptocurrencies like Bitcoin.

However, it is impossible to ignore that consumer confidence data often includes information on inflation expectations. Therefore, the minutes of the Federal Open Market Committee meeting on Wednesday will be crucial. If consumers expect higher inflation, they may look for alternative stores of value to protect their wealth. Bitcoin, often referred to as “Digital gold“, may benefit from higher interest rates as a hedge against inflation.

US employment report and unemployment rate

The US employment report and unemployment rate, scheduled for release on Friday, are crucial indicators of the health of the economy. The employment report is expected to show 155,000 new jobs, down from 227,000 the previous month, while the unemployment rate is expected to remain at 4.2%.

Strong job growth and low unemployment typically boost investor confidence and market optimism. This positive sentiment could extend to the cryptocurrency market, attracting interest in assets like Bitcoin.

Employment data also affects investors’ appetite for risk. A strong report indicating a strong labor market may encourage risk-taking, which could lead to increased demand for riskier assets, including cryptocurrencies. Conversely, weak data may lead to more cautious behavior, affecting demand for cryptocurrencies.

Changes in the labor market and unemployment rate can affect inflation expectations. If employment data indicates strong economic growth and rising wages, this could raise concerns about inflation. In such cases, investors may view Bitcoin as a currency Hedging against inflationWhich led to increased interest in cryptocurrency.