Bitcoin and other major cryptocurrencies are poised to react in tandem with stock market movements, influenced by a critical US jobs report set to be released later on Friday. Recent data suggests a notable short-term correlation between cryptocurrencies and equities.
According to Bloomberg data, the 30-day correlation coefficient between a gauge of the top 100 digital assets and MSCI’s global stock index is approaching 0.60, one of the highest levels observed in the past two years. A correlation of 1 indicates assets are moving in sync, while -1 suggests an inverse relationship.
Market participants are anxiously awaiting the employment data, amid speculation about potential economic slowdowns in the US and the Federal Reserve’s future interest rate decisions. A weak jobs report from the previous month had already triggered volatility across global markets, including a downturn in cryptocurrency values.
“Bitcoin has been responding to macroeconomic events with a high degree of correlation to equities,” remarked Benjamin Celermajer, co-chief investment officer at Magnet Capital. He noted that sentiment has been “pretty poor” over the past two weeks and highlighted $55,000 as a crucial support level for Bitcoin.
At midday on Friday in Singapore, Bitcoin had risen approximately 1% to $56,653, although it remains about $17,000 below its all-time high reached in March. Other cryptocurrencies like Ether and Solana also showed modest gains. Meanwhile, US equity futures displayed caution, reflecting uncertainty ahead of the payrolls data for August.
The surge in inflows into US spot-Bitcoin exchange-traded funds earlier this year initially fueled Bitcoin’s record-breaking rally. However, the momentum has since waned, with recent days witnessing outflows from these ETFs.
“The key will be the details of the jobs report tonight,” said Cici Lu McCalman, founder of blockchain advisory firm Venn Link Partners. She cautioned that robust data could dampen expectations for Federal Reserve rate cuts. Looser monetary policy is generally seen as beneficial for speculative assets like cryptocurrencies. Analysts predict that the jobs report will reveal a rise in hiring and a slight decrease in the unemployment rate, indicating stabilization after July’s unsettling data.
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