The cryptocurrency market is poised for an eventful week as investors closely watch U.S. labor market updates and their potential impact on Federal Reserve rate cut expectations. Recent positive inflation data has already pushed Bitcoin (BTC) to test the $66,000 level, with market participants now turning their attention to upcoming employment reports.
Recent Market Movements
Bitcoin recently retested the $66,000 mark following better-than-expected August inflation data. The Core PCE Index, the Fed’s preferred inflation gauge, showed a year-on-year increase of 2.6%, lower than the anticipated 2.7%. This positive surprise boosted market sentiment, with speculators pricing in higher odds of a 50 basis point Fed rate cut in November.
Ethereum (ETH) has also been performing well, outpacing Bitcoin since the Fed’s pivot. Market analyst Benjamin Cowen suggests that ETH could potentially reach the psychological level of $3,000 if current trends continue.
Key Labor Market Indicators
As inflation concerns ease, the focus shifts to the U.S. labor market. Trading firm QCP Capital noted in a weekend brief, “As we head into next week, the key focus will be on upcoming labour market indicators, including JOLTs, ADP, and U.S unemployment rate.”
Critical updates to watch include:
- JOLTs (Job Openings and Labor Turnover Survey) on November 1
- Employment Situation report on November 4
QCP Capital added, “Strong performance in these metrics could bolster the case for a 50bps cut in November, further propelling risk assets.”
Investor Sentiment and ETF Inflows
Positive sentiment is already evident in the market, with U.S. Bitcoin ETFs seeing $1.11 billion in inflows last week, the largest since July 19. Ethereum ETFs also attracted $84.6 million, marking their biggest weekly inflow since August 9.
Market Outlook
If labor market data supports the case for rate cuts, Bitcoin could push towards the $70,000 level, particularly if it reclaims its 200-day Moving Average. Ethereum’s target of $3,000 per coin also appears more feasible under these conditions.
However, as of early Monday trading in Asia, crypto markets were experiencing a significant pullback. Total market capitalization had fallen by over 3% to $2.37 trillion. Bitcoin dropped from $66,000 to below $64,400, while Ethereum declined to $2,600. Altcoins such as Binance Coin (BNB), Dogecoin (DOGE), and Shiba Inu (SHIB) were seeing even steeper losses.
Events to Watch This Week
- Fed Chair Jerome Powell’s speech on the U.S. economic outlook (September 30)
- ISM Manufacturing PMI report (October 1)
- Employment data reports (October 1-2)
- Initial jobless claims data (October 3)
- ISM Services PMI report (October 3)
- September jobs report, including Nonfarm Payrolls and Unemployment data (October 4)
As the third quarter comes to a close, these economic events could set the tone for cryptocurrency markets in the final quarter of 2024. Investors and traders should remain vigilant, as the interplay between economic data and Fed policy expectations continues to drive market sentiment in the crypto space.
