The cryptocurrency market is bracing for what could be a volatile September as key economic data releases, particularly those related to employment, have a major effect on the performance of digital assets.
Several major events are scheduled this month that could have a major impact on the digital asset landscape as well as traditional markets. This week, the focus will be on employment data, as a number of reports that are likely to influence market sentiment are scheduled. Fears of an impending economic slowdown are reinforced by the latest downward revisions to employment forecasts, which point to a contraction in the labor market.
The market is likely heavily focused on jobs data this week
The forecast seems more oriented towards a weakening of the labor market after the recent downward revision
~ expectation of a downward trajectory in employment
that being said, there is likely a higher volatility outcome if… Skew Δ (@52kskew) September 2, 2024
In the past, a recession has often followed when private sector employment contributions fell below 40%. The latest data suggests that threshold is getting closer, making markets nervous. The week begins with ISM manufacturing data on Tuesday, which sheds light on the state of the industrial sector.
Data from the Job Openings and Labor Turnover Survey (JOLT) and factory orders, which provide insight into the state of the labor market and the strength of the manufacturing sector, will be released immediately after Wednesday. Friday’s nonfarm payrolls (NFP) report is expected to be the main market driver, but Thursday’s jobless claims data, job cuts at rival firms and ISM services helped set the stage.
The unemployment rate, average hourly wage participation rate, and Friday’s NFP report will all be closely watched for any indication of deviation from expectations. Any unexpected increase in employment, such as better-than-expected job growth, could cause considerable volatility across all asset classes, including cryptocurrencies, given the market’s current pessimistic view on the employment situation.
The implications for digital assets are twofold. On the one hand, a surprisingly weak labor market could intensify recession fears and prompt people to flee to safe havens, which could hurt more volatile assets like cryptocurrencies.
