At 8:30 PM tonight, the U.S. Bureau of Labor Statistics is set to release the May non-farm payroll report, which is highly anticipated by the market. Currently, both companies and consumers are preparing for higher tariffs and economic uncertainty, and it is almost certain that employment growth in May will significantly slow down; what everyone is most concerned about is just how much the slowdown will be.
If the data only slightly deviates from recent trends, it may not trigger market concerns.
However, once this range is exceeded, it may trigger a new wave of concerns in the market about the labor market and the overall economy, and could even prompt the Fed to take rate actions sooner than expected.
Julian LeFarge, Chief Market Strategist at Barclays Private Bank, pointed out that market expectations have been adjusted downward before the non-farm data is released. If the data lands around 100,000 (below market consensus), it may be seen as 'not as bad as feared'; if it is below 100,000, it could reignite market concerns about a recession; while data above expectations could be detrimental to risk assets as it may push up U.S. Treasury yields.
Currently, there is a divergence between soft and hard data in the U.S. economy. Surveys in manufacturing and services, as well as small business confidence indexes and other broad sentiment indicators, show that market optimism about the economy is waning, mainly due to tariffs and the inflation they may provoke.
As the labor market serves as a 'barometer' for nearly 70% of U.S. economic activity driven by consumption, Friday's employment report becomes crucial as it will provide clues about the strength of the U.S. economy and help the market find a balance between concerns over a slowing labor market and rising inflation.
Investors also want to gauge the impact of this data on Federal Reserve policy. The current market expects that there will be no further rate cuts before September, and most policymakers have recently focused on the inflationary impact of tariffs, but they also emphasize that they will pay attention to employment data and call for patience until the situation becomes clearer.
However, Trump clearly lacks patience, as after the release of the U.S. May ADP employment data, he called for Powell to cut rates now.
For Bitcoin, the impact of non-farm data is quite complex. From a macro perspective, if non-farm data performs strongly, it indicates a positive U.S. economy, and funds may flow out of risk assets like Bitcoin to traditional financial markets, which would be unfavorable for Bitcoin's price.
For instance, when economic data is good, investors tend to favor traditional assets like stocks and bonds, reducing the demand for Bitcoin.
Conversely, if the non-farm data is poor and the economic outlook is concerning, it may trigger risk-averse sentiment in the market, leading funds to flow into traditional safe-haven assets like gold. Although Bitcoin is also viewed as a safe-haven asset by some investors, its recognition is not as strong as gold, so it may not attract a large influx of funds.
On the other hand, a poor economic outlook may prompt the Federal Reserve to adopt a more accommodative monetary policy, increasing the money supply, which theoretically would lead to more funds flowing into the market, and Bitcoin may also benefit from this, but it still depends on the market's risk appetite.
If market concerns about a recession intensify, there may be a stronger tendency to hold cash, which could put pressure on Bitcoin's price.
If Bitcoin breaks below 100,000 tonight, attention should be paid to the support strength in the 95,000-98,000 range, as this will lengthen the overall adjustment time in the market.
If we hit the bottom quickly and then see a rebound, perhaps after returning to 110,000, we may break through new highs again.
Ethereum has already fallen to the support level of the previous low in mid-May, with a magnitude exceeding the last overbought correction. A bullish divergence signal has appeared, but a oversold signal has yet to be triggered.
The decline has been sufficient, the position has arrived, but the 'bottom' cannot be concluded yet. At this position, the top priority is to withdraw some short positions in advance, and adjust the support level accordingly.
After last night's decline, what is known now is that the bottom is at 100,000/2380, the market is currently leaning toward a correction, although the whiteboard is warming up, there has been no significant effective improvement, which can temporarily be seen as a normal market correction.
In summary, non-farm data indirectly affects Bitcoin in multiple ways by influencing market expectations about the economic outlook, the direction of Federal Reserve monetary policy, and investors' risk preferences. The decisive moment will come after the evening's directional indicator is released.
Currently, all eyes are on the non-farm data, just waiting for this evening's operation to take off like a rocket, but which direction it will fly still depends on tonight's news. Let's get ready with Yomi and look forward to it!
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