- The crypto market moves will depend on five major US economic reports including employment data, Federal Reserve meeting minutes, and consumer sentiment figures.
- Strong labor market data could lead to higher consumer confidence and increased demand for crypto.
This week, the crypto market could be volatile due to five major US economic data releases that will affect market sentiment. Thus, traders and investors are monitoring employment figures, Federal Reserve insights, and consumer sentiment reports.
ADP Employment Data
The ADP National Employment Report is scheduled for Wednesday, January 8. It will show private-sector job growth in the US for December. This report, based on payroll data from 400,000 businesses, is expected to be up 130,000 jobs, down from November’s 146,000.
November figures already showed that the annual increase in pay for job-stayers is finally growing for the first time in two years. This could mean a better-than-expected December, which might make the job market look even healthier and, thus, strengthen the US dollar.
Positive labor market data might also mean better consumer confidence and increased consumer spending and investment in assets like Bitcoin. But the strong data might also lead the Federal Reserve to keep raising or maintaining higher interest rates, making crypto market less attractive.
Federal Reserve Meeting Minutes and Crypto Market Move
Minutes from the Federal Open Market Committee’s (FOMC) meeting of December 17-18 are set to be published on Wednesday. The FOMC members like Thomas Barkin, Jeffrey Schmid, and Patrick Harker would provide clues about the Fed’s interest rate plans.
The Fed has communicated fewer rate cuts in 2025 as there are persistent signs of inflation and resilience of the economy. Market players pay extra attention to these minutes, considering whether a dovish outlook from the Fed would reflect in monetary policies. A stronger stance might curtail demand for risk assets including cryptocurrencies. On X user noted:
Globally, the FOMC’s December minutes will dominate discussions, as the Fed’s cautious tone for 2025, with just two rate cuts projected, reflects a shift from prior optimism. This, coupled with Trump policy announcements, could keep markets on edge.
Unemployment Report and Its Impact on Crypto Market
The US employment report and unemployment rate, due Friday, are also key economic indicators. Economists estimate that 155,000 new jobs were added in December, down from November’s 227,000, while the unemployment rate is expected to remain unchanged at 4.2%.
Solid employment numbers can be a boost to investor optimism and risk appetite. This may increase demand for cryptocurrencies, which are considered high-risk assets. Weak job growth may also temper market enthusiasm, affecting demand for Bitcoin and crypto market.
Initial Jobless Claims Report
Thursday’s initial jobless claims report will give an insight into the dynamics of the labor market. Preliminary data for the week ending January 3 showed 211,000 claims, the lowest since August. This decrease represents fewer layoffs and a sign of economic stability. While new claims have eased off, increased ongoing claims indicate that the jobless are unlikely to land new jobs any time soon.
Businesses seem not eager to trim their payrolls, hiring at a slow rate. Labor market conditions will likely remain this way as business assesses the economic environment in a Donald Trump administration. A good labor market will surely fuel more consumer spending and perhaps more demand for Bitcoin, per the CNF report.
Consumer Confidence Index
On Friday, the preliminary University of Michigan Consumer Sentiment Index will provide insights into consumer confidence. A higher reading may further enhance optimism in financial markets, including crypto market. Consumer sentiment also reflects inflation expectations. If higher inflation is expected, alternative stores of value like Bitcoin could attract attention.
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