Key Takeaways
- U.S. Non-Farm Payroll data shows 73,000 jobs added in July, missing market expectations.
- Bitcoin consolidates near $115K while DXY is down 1.23% as an initial market reaction.
- Investors remain cautious as trade tensions weigh on market sentiments.
Wall Street fell on Friday as the U.S. Non-Farm payroll (NFP) data, which came in lower-than-expected for July, and sweeping new tariffs from President Trump rattled investor confidence.
The Labor Department’s closely watched employment report on Friday, August 1 showed that 73,000 jobs were added in the month of July, compared to market expectations of an increase of 110,000 jobs, per Reuters report. The number also comes in significantly lower than June numbers of 147K job increase.
The report also showed that the unemployment rate rose slightly to 4.2% as compared to 4.1% in June. Since May 2024, the unemployment rate has been continuously low, ranging from 4% to 4.2%.
Meanwhile, Trump’s administration imposed tariffs as high as 40% on imports from key trade partners, including China, India, and Brazil, fueling trade tensions.
The U.S. Dollar Index (DXY) fell 1.23% as an initial market reaction. Furthermore, the Dow E-minis had dropped 0.96%, the S&P 500 E-minis had dropped 1.02%, and the Nasdaq 100 E-minis had dropped 1.15% according to Reuters data.
On the other hand, Bitcoin continues to trade in a sideway manner, with a negative bias. Ethereum fell more than 1%, and XRP lost 1.47%.
Why Does Non-Farm Payroll Matters for Crypto Markets?
Non-farm payroll data impacts inflation while also highlighting the conditions of the U.S. labour market. The data plays a crucial role in the Fed’s rate decision. The recent employment data increased the odds of September rate cuts.
Powell’s July interest rate decision comments have affected crypto markets. That coupled with tariff rollouts, risk aversion and moderate institutional buying has made Bitcoin slip below key levels.
Rate cuts in September can help raise risk appetite in investors, further helping Bitcoin’s future prices. As TimesCrypto reported earlier, analysts see short-term volatility for crypto markets but expect the conditions to improve in the long-term.
Fed’s September Rate Decision to Rely on Upcoming Data Points: What Are Crypto Markets Looking Out For?
Fed’s monetary policy has time and again shaped the trajectory of the crypto market. A lower interest rate usually makes government-backed assets less alluring for investors, giving rise to their risk appetite. The higher risk appetite generally boosts prices in the crypto market.
With the prevailing uncertainties, Bitunix analysts recommend that the overall bias for Bitcoin remains bearish. They add that $BTC is nearing a decision point at the triangle apex, and traders are advised to avoid chasing price. Instead, wait for a clear breakout above $118,800 before considering new positions.
