Will the revision of the non-farm payroll data lead to a market crash?

Will the revision of the non-farm payroll data lead to a market crash?

Market analysis

1. Will the market crash due to interest rate cuts?

Andrew Tyler, head of JPMorgan's trading desk, suggested that after the Federal Reserve cuts interest rates, the market might experience a 'sell the news' situation. This means that the market has already priced in the expectations of an interest rate cut, and once the expectation is realized, some investors might choose to take profits rather than chase higher prices.

He is mainly concerned about the following points:

Inflation uncertainty remains: Although the market generally expects the Federal Reserve to cut interest rates, the rising costs brought about by tariff policies may continue to be passed on to consumers. The core CPI in the U.S. rose by 3.1% year-on-year in July, and inflationary pressures have not completely dissipated.

Labor market and 'sticky' wage inflation: If rate cuts stimulate economic demand, labor demand may increase. Against a backdrop of limited labor supply due to factors like immigration policy, this could push up wage levels. Wage inflation typically has 'stickiness' (decreases slowly), which could make inflation more persistent.

Market's inherent fragility: The US stock S&P 500 index has risen over 30% this year, with no low valuation. Additionally, factors like weakened corporate stock buyback intentions and decreased retail investor participation have also reduced the market's capacity to absorb.

The correlation between the macro environment and cryptocurrencies

The cryptocurrency market, especially Bitcoin and Ethereum, is increasingly linked to traditional financial markets, particularly US stocks and macro policies.

1. Liquidity expectations: A rate cut by the Federal Reserve usually signifies a trend towards looser market liquidity. Historically, abundant liquidity has somewhat supported the prices of risk assets such as Bitcoin and Ethereum.

2. Weakening dollar index: Rate cut expectations may suppress the dollar index. When the dollar weakens, Bitcoin and Ethereum, priced in dollars, appear 'cheaper' to holders of other currencies, potentially attracting capital inflows.

3. 'Risk asset' attributes: Bitcoin and Ethereum are still viewed by many investors as 'risk assets'. When major risk markets like US stocks adjust, the cryptocurrency market may also experience emotional contagion, leading to short-term synchronous declines.

Bitcoin (BTC) and Ethereum (ETH) intraday trend analysis

Based on the above macro background and the current technical situation, the following is the intraday trend analysis for BTC and ETH:

Currency Key support level Key resistance level Intraday expectation

Bitcoin $110,800 - $110,000 $112,550 - $113,000 Range consolidation, waiting for direction choice

Ethereum $4,250 - $4,230 $4,370 - $4,450 Consolidating within the triangle, seeking a breakout

Bitcoin (BTC):

Current status: Price is fluctuating around $111,600, overall in a range consolidation pattern.

Technical analysis: Although the technical indicators suggest a bullish trend (such as multiple bullish daily candles and strong market sentiment, with 2-hour K-line lows gradually rising), recent volume shrinkage limits further price breakthroughs. Attention is needed to see if it can successfully break through the resistance level of $113,000.

Operational thoughts: In the short term, it may continue to fluctuate between $110,000 and $113,000. If it stabilizes near $111,000, consider a light long position; if it encounters resistance near $113,500, consider a light short position.

Ethereum (ETH):

Current status: Price is around $4,300 (approximately $4,297), currently in a typical range consolidation pattern.

Technical analysis: From the 4-hour chart, the price is consolidating within a tightening symmetrical triangle, with volume also shrinking, indicating a lack of clear trend direction in the market. $4,370 is a key breakout point for the triangle's upper boundary.

Operational thoughts: Before a breakout at the triangle's end, consider a light long position near $4,280 or a light short position near $4,450.

Market outlook and operational suggestions

1. Pay attention to key events:

US August CPI data (to be announced): This data will significantly influence market expectations regarding Federal Reserve policies and may trigger short-term violent fluctuations.

Federal Reserve's September interest rate meeting (September 17): it is not only about whether to lower interest rates (25 or 50 basis points), but the dot plot and Powell's statements are more critical as they indicate the future interest rate path.

2. General investor operational thoughts:

Short-term: Control positions and avoid heavy bets ahead of important events. Consider high selling and low buying near support and resistance levels, but be sure to set stop-loss orders.

Medium to long-term: If optimistic about the long-term value of cryptocurrencies, a phased approach is a good strategy to avoid disrupting plans due to short-term volatility.

3. Asset allocation considerations:

JPMorgan suggests that stock investors consider increasing their allocation to gold, as expectations of rate cuts are weakening the dollar. This logic also applies to Bitcoin, which acts as 'digital gold', but its volatility is much greater than that of gold.

Investors should consider the risk tolerance of their overall asset portfolio and avoid putting all funds into the highly volatile cryptocurrency market.

Summary

The current market is in a wait-and-see period before the 'expectations are realized'. JPMorgan's warning reminds us that market volatility may increase after the news lands.

For Bitcoin and Ethereum:

• Short-term trends are heavily influenced by the sentiment of US stocks and the US dollar index, with attention needed on US CPI data and the Federal Reserve meeting results.

• From a technical perspective, both are at critical decision points and require a volume breakout to open up new space.

In terms of operations, it is recommended to be cautious and prioritize risk management. Closely monitor changes in macro trends to adjust strategies in a timely manner.