Can Non-farm Payroll provide some relief for the market?

GB Market Commentary 02/09/2022

by Marcus Sotiriou

Bitcoin remains around $20,000 as investors eagerly anticipate the results of the NFP (Non-farms Payroll) data which is being released at 2.30pm UK time.

NFP is the total number of paid workers in the U.S. excluding those employed by farms, the federal government, private households, and non-profit organisations. This key economic data provides an insight into the strength of the U.S. economy, and consistently causes one of the largest rate movements of any news announcement in the forex market.

If the NFP shows a month-over-month Increase, this could relate to economic expansion but also demonstrates how inflation could remain elevated for longer.

If the NFP is lower than July’s results, this could suggest a weakening economy, yet this would be positive in my opinion for global markets, as inflation is publicised as the biggest concern currently (especially for risk-assets like Bitcoin).

Also, the most important event which the market is watching out for at the moment is how aggressive the Federal Reserve will be this month with the next rate hike – if NFP is lower than anticipated then this gives the Federal Reserve more data to be less aggressive, provided that unemployment remains low, hence potentially providing fuel for some upside within the crypto market.

On-chain data continues to provide hope for Bitcoin bulls that a trend reversal may arrive in the coming weeks. The above chart from Glassnode shows the Bitcoin price overlapped with LTH (Long-Term Holder) Realised Price and STH (Short Term Holder) Realised Price.

We can see that historically, Bitcoin has bottomed in bear markets when the LTH Realised Price and STH Realised Price overlap, and Bitcoin is currently $2k away from overlapping. Although we only have 3 data points to go off, this data suggests the bottom could be closer than you think.