Bitcoin is facing a significant drop in price this week due to fears surrounding Mt. Gox, which has led to the largest weekly decline since November 2022. The cryptocurrency dipped below $54,000 early on Friday after reports that Mt. Gox had moved $2.6 billion worth of BTC for creditor repayments. However, Mt. Gox later announced that it had started repaying its customers, resulting in a more subdued reaction from bitcoin.
As of now, bitcoin is down over 13% for the week, marking the most substantial single-week percentage decline since FTX’s collapse in November 2022. Analysts are now looking towards Friday’s U.S. jobs report to potentially stabilize the decline. The U.S. Bureau of Labor Statistics is set to release the nonfarm payrolls (NFP) report for June, which is expected to show a significant slowdown in job additions compared to May.
Economists predict that the NFP data will reveal an addition of 190,000 jobs in June, down from 272,000 in May, while keeping the jobless rate steady at 4%. This potential moderation in job growth could lead to a positive impact on bitcoin prices, as investors might turn to alternative assets like cryptocurrencies in anticipation of looser monetary policies.
The inflation rate is also a key concern for macro traders, who have been closely monitoring the possibility of Fed rate cuts. Following last week’s soft U.S. PCE inflation data, traders have already priced in two rate cuts for this year. If Friday’s jobs report shows weaker-than-expected job growth, it could further solidify expectations for future rate cuts, potentially boosting bitcoin prices.
Jag Kooner, head of derivatives at Bitfinex, highlighted that if the job market appears more resilient, bitcoin could face downward pressure as the likelihood of near-term rate cuts diminishes. However, the inflows into spot bitcoin ETFs in the U.S. may increase if economic uncertainty continues to drive expectations of rate cuts.
Overall, the performance of bitcoin in the coming days will be closely tied to the outcome of the U.S. jobs report and the broader market sentiment. Traders and investors will be monitoring these factors to gauge the direction of bitcoin prices amidst the current economic uncertainties.
