Non-farm payrolls affecting the cryptocurrency circle! If employment rebounds, will it drive Bitcoin up?

The relationship between cryptocurrency and the stock market is becoming increasingly close, especially influenced by recent economic data.

Data compiled by Bloomberg shows that the correlation coefficient between cryptocurrency and the MSCI World Stock Index is close to 0.6, one of the highest levels in the past two years. A reading of 1 indicates synchronous movement of assets, while -1 indicates inverse movement. This means that the trends between these two markets are becoming more and more similar.

In other words, when the market reacts to the August non-farm payroll data tonight, the price of cryptocurrency will also fluctuate accordingly. The market generally believes that the upcoming employment data will show positive signals, indicating that the U.S. economy is trending towards stability.

Tonight's non-farm data will be crucial in determining the price of Bitcoin

Investors are closely watching the upcoming U.S. August non-farm payroll data. If the employment data performs poorly, it would mean that the U.S. economy is entering a recession, and the Federal Reserve may take more aggressive rate cuts to stimulate the economy. Last month's unexpectedly weak employment report triggered global market volatility, with cryptocurrency also plummeting.

Benjamin Celermajer, Co-Chief Investment Officer of Magnet Capital, stated: "When facing macroeconomic events, Bitcoin has always been highly correlated with stocks. Market sentiment has been 'quite bad' in the past two weeks, and $55,000 is a key support level worth paying attention to for Bitcoin."

As of the time of writing, the price of Bitcoin has slightly dropped to $55,588, trading about $17,000 lower than the historical high set in March. Ethereum and smaller tokens like Solana have also seen slight declines. U.S. stock futures are fluctuating, indicating a cautious stance in the market ahead of the August employment data.

Analysis points out that the inflow of the U.S. spot Bitcoin exchange-traded fund earlier this year stimulated the rise in Bitcoin prices, creating a bull market, but this upward trend did not continue. Recently, investors have started to withdraw funds from Bitcoin ETFs, leading to a decline in Bitcoin prices.

"The details of tonight's employment report will be crucial," said Cici Lu McCalman, founder of blockchain consulting firm Venn Link Partners. "This data is enough to weaken bets on a Fed rate cut."

The current loose monetary policy of the Federal Reserve is generally considered favorable for speculative assets like cryptocurrency. Market analysts widely believe that the upcoming employment data will show positive signals, such as an increase in hiring or a decrease in the unemployment rate. This indicates that after the growth concerns triggered by the July data, the economy is trending towards stability