Bitcoin and the stock market "dance together"! Tonight's US employment report may trigger intense volatility in the crypto market

According to the Zhitong Finance and Economics APP, if the short-term correlation between the cryptocurrency and stock markets can be used as a reference, then Bitcoin and other major digital tokens may fluctuate with the stock market's reaction to the upcoming important US employment report. Data shows that the correlation coefficient between an index measuring the top 100 digital assets and the MSCI Global Stock Index is close to 0.60 over the past two years, one of the highest levels.

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Investors are concerned about the employment data as uncertainty looms over whether the US is experiencing an economic slowdown and the subsequent interest rate cut measures that the Federal Reserve might take. Last month's employment report unexpectedly showed weakness, causing turmoil in global markets, including a sharp decline in the cryptocurrency market.

Currently, the market generally expects an increase of 165,000 in non-farm payrolls for August, with the unemployment rate expected to remain at 4.2%. The results of this report will provide important clues to investors about the US economic situation and the Federal Reserve's policy direction.

Benjamin Celermajer, Co-Chief Investment Officer at Magnet Capital, pointed out, "Bitcoin's response to macro events is highly correlated with stocks." He mentioned that market sentiment has been "quite bad" in the past two weeks, with $55,000 being a key support level worth watching for Bitcoin.

At the time of writing, Bitcoin has risen by about 0.35%, trading at $56,372 per coin, approximately $17,000 lower than the historical high set in March. Small tokens like Ethereum and Solana have also seen slight increases. The volatility of US stock index futures indicates that caution should be maintained in the market before the release of the August non-farm payrolls data.

Earlier this year, inflows into US spot Bitcoin exchange-traded funds (ETFs) drove this largest digital asset to hit a historic high. However, the bull market has gradually faded, and ETFs have experienced outflows in recent days.

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Cici Lu McCalman, Founder of blockchain consultancy Venn Link Partners, stated, "The details of tonight's employment report will determine everything." She pointed out that one risk is that if the data is strong enough, it may dampen market expectations for a Fed rate cut Loose monetary policy is generally seen as favorable for speculative assets such as cryptocurrencies. Forecasters expect the employment data to show a rebound in hiring numbers, with a slight decrease in the unemployment rate, which may signal economic stabilization after growth concerns sparked by July data