How US job market slump could boost Bitcoin prices

Zoltan Vardai10 hours agoHow US job market slump could boost Bitcoin pricesBitcoin could rise due to a weaker job market, but Bitcoin ETFs are on track to their third consecutive week of net negative outflows.5257 Total views4 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksBitcoin and other risk assets could stand to benefit from a weakening job market and increasing unemployment in the United States, the world’s largest economy.

The unemployment rate in the U.S. increased to 4.1%, surpassing the previously anticipated 4.0% and reaching its highest level since December 2021.

The U.S. economy added 206,000 jobs in June. While this is above the expected 191,000, it is considerably lower compared to the 272,000 jobs added in May, which was subsequently revised to 218,000, according to the nonfarm payroll data published by the Bureau of Labor Statistics on July 5.

A weakening labor market in the U.S. could be a positive catalyst for Bitcoin’s (BTC) price, according to Jag Kooner, head of derivatives at Bitfinex. Kooner told Cointelegraph.“If the NFP report shows weaker-than-expected job growth, it could increase expectations for future rate cuts, which might bolster Bitcoin prices as investors seek alternative assets in anticipation of a looser monetary policy.”

The price of Bitcoin has remained trapped in a downtrend for over a month, falling below the significant $60,000 mark.

Related:Up to 99% of Mt. Gox’s $8.2B Bitcoin could be sold — AnalystBitcoin falls below $54,000 to a four-month low

Bitcoin’s price dropped by over 10.5% in the 24 hours leading up to 1:04 pm UTC on July 5, reaching a more than four-month low of $53,550. According to Bitstamp data, the last time Bitcoin traded at this level was in February 2024.BTC/USD, YTD chart. Source:TradingView

While some traders worry that the bull cycle has ended, other analysts, like the popular analyst Rekt Capital, view the current correction as consistent with past Bitcoin corrections.

The analyst wrote in a July 4 X post:“This pullback is -21% deep & 45 days long. In this cycle, average retrace depth is -22% & average retrace duration is 42 days. In terms of retrace depth, this is almost an average retrace. In terms of retrace duration, this is an above-average pullback.”BTC/USD, 1-week chart. Source:Rekt Capital

Related:Ether ETFs will only be a ‘sidekick’ to Bitcoin ETFs — Bloomberg analystWhat about Bitcoin ETF flows?

Institutional inflows from the U.S. spot Bitcoin exchange-traded funds (ETFs) have also been lagging behind.

The U.S. ETFs are about to log their third consecutive week of net negative inflows, with over $315 million worth of cumulative net outflows so far this week, according to Dune data.Bitcoin ETF net weekly flows. Source:Dune

Bitcoin ETF flows could potentially see an uptick, if the weakening labor market can drive expectations of a potential interest rate cut, according to Kooner. He said:“Bitcoin ETF flows might see an uptick if market participants believe that economic uncertainty will drive the Fed towards eventual rate cuts, enhancing the appeal of Bitcoin as an inflation hedge. However, significant inflows would depend on broader market sentiment and risk appetite.”

However, Kooner also notes that there has recently been a lack of inflows and “dip-buying” purchases.

Magazine:Could a financial crisis end crypto’s bull run?# Bitcoin# Bitcoin Price# Job# United States# Bitcoin ETFAdd reaction