The U.S. private labor market unexpectedly cooled in November. What is the effect on Bitcoin?

Source: CritpoTendencia Original Title: The US private labor market cooled unexpectedly in November, what is the effect on Bitcoin? Original Link: During November, private payrolls in the United States experienced an unexpected cooling, according to data from Automatic Data Processing (ADP). This result deepens the deterioration of the labor market, a factor that theoretically has a positive effect on the price of Bitcoin and other cryptocurrencies in the short term.

According to the report, nonfarm private payrolls suffered a notable decline, led by layoffs in small businesses. Large companies (with 50 or more employees) saw an increase of 90,000 jobs. In contrast, small businesses (50 employees or fewer) cut 120,000 jobs.

This left a net negative result of 32,000 jobs lost in the private sector. This is a particularly low figure, considering that Wall Street expected an increase of 5,000 jobs. In addition, it represents a deterioration compared to October, when 47,000 new jobs were created after data revisions.

“Hiring has been uneven lately, as employers face cautious consumers and an uncertain macroeconomic environment,” said Nella Richardson, chief economist at ADP. This report is the last labor indicator the Federal Reserve will analyze before the monetary policy meeting on December 9 and 10.

This point is key to understanding the impact of these data on Bitcoin and other risk assets.

Why could this data have a positive effect on Bitcoin?

The private payroll data confirm that the US labor market is going through a complex moment. This is closely related to the prolonged high interest rate policy, which puts pressure on companies by making access to credit more difficult.

As a result, the deterioration of the labor market increases the likelihood that the Federal Reserve will implement a rate cut at its next meeting. The market virtually takes it for granted that the Fed will move toward a more flexible policy within 7 days.

This context is favorable for the price of Bitcoin in the short term. The expectation of lower rates boosts risk appetite, benefiting stocks and cryptocurrencies through capital inflows.

At the time of writing, the price of BTC is trading above $93,000, with a daily return of 2.2% and a weekly return of 3.3%.