As a seasoned crypto investor with a decade of market experience under my belt, I find myself bracing for the rollercoaster ride that is expected to unfold in the global financial and crypto markets this Wednesday, August 21st. The upcoming FOMC meeting and the release of the US jobs report have always been major events, but their significance this time around feels particularly palpable.
On Wednesday, August 21st, everyone is anxiously awaiting the opening of the U.S. stock market, particularly interested in the FOMC meeting. This day holds significant importance for both the global financial market and the crypto market. The Goldman Sachs Economics Research team has shared a note with clients, suggesting that the U.S. jobs data might be inaccurate.
As a crypto investor, I’m eagerly waiting for the upcoming release of the preliminary estimate on the monthly nonfarm payrolls by the US Bureau of Labor Statistics, scheduled for today. Typically, this jobs report is published during the summer months and covers the period from April to March. This report will provide valuable insights into the employment situation in the United States, which could potentially impact various economic indicators and, indirectly, the crypto market as well.
According to market analysts, the Bureau of Labor Statistics report, released on Tuesday, is expected to show that job growth in the preceding month was less than initially anticipated. On this topic, signalPlus, a technology company specializing in making cryptocurrency options accessible to all, shared its market insights.
“Next Wednesday, the Federal Reserve is set to get updated job growth data. This information might show that job growth between the end of last year and early this year was less robust than initially thought.”
Conversely, financial powerhouse Morgan Stanley anticipates reducing the number of jobs reported in payroll data by approximately 600,000. This significant adjustment could rekindle worries about recession, leading investors to move away from riskier assets like cryptocurrencies and instead opt for safer investments.
Additionally, Goldman Sachs analysts anticipate a potential decrease in the average monthly nonfarm payroll growth, which was approximately 250,000 jobs from April 2023 to March 2024. This projected number might be adjusted downward to between 165,000 and 200,000 jobs per month moving forward.
Goldman Sachs contends that the estimated rate of job creation during that particular timeframe might be overestimated, with the actual figure likely being around 200,000 to 240,000 new jobs per month.
Bitcoin Bears Should be Watchful
In the near future, the unveiling of macro indicators may cause fluctuations in Bitcoin prices temporarily. However, it’s important for bearish investors to tread cautiously as new findings from K33 Research suggest a potential Bitcoin Short squeeze could lead to significant price surges in the world’s leading cryptocurrency.
At K33 Research, our team is examining Bitcoin derivatives information like the BTC funding rate for perpetual futures to forecast either a bullish or bearish trend. As of August 20th, they’ve observed that the seven-day average annualized funding rate has reached its lowest point since March 2023, currently sitting at -2.5%. The analysts have commented:
Over the last seven days, I’ve noticed that the perpetual swap funding rates have consistently been below zero. At the same time, there’s been a significant rise in open interest. This pattern indicates heavy shorting, setting up a situation primed for a short squeeze. In simpler terms, it seems like many traders are betting against a particular cryptocurrency, but if its price suddenly rises, they might have to buy back at a higher price to cover their positions, which could push the price even higher in a ‘short squeeze’.
Additionally, K33 Research highlighted an increase of approximately 29,000 Bitcoins in the notional open interest for the perpetual market over the past week. Lunde and Zimmerman observed that such a swift rise in open interest along with a negative funding rate is relatively unusual.
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2024-08-21 16:10