Goldman Sachs Analysis Reveals Potential Job Data Overestimation and Caution for Bitcoin Bears
Today marks a momentous day for the global financial market, with heightened attention on the opening of the US market and the impending FOMC meeting. In a recent communication to clients, the Goldman Sachs Economics Research team has raised concerns regarding potential inaccuracies in the US jobs data and the potential impact on the market.
The US Bureau of Labor Statistics (BLS) is scheduled to release a preliminary estimate of the monthly nonfarm payrolls (jobs report) for the period of April 2023 to March 2024. Speculation abounds regarding a potential downward revision in the job growth figures, which could prompt recession apprehensions and a repositioning from risk assets, including cryptocurrencies.
Market observers anticipate that the BLS report will indicate weaker job growth than previously estimated in the year leading up to March. This sentiment is echoed by financial institution Morgan Stanley, which foresees a substantial downward revision in payroll data, with an anticipated reduction of 600,000 jobs from current reports.
Furthermore, Goldman Sachs also foresees a downward revision in nonfarm payroll growth, with an average of 250,000 jobs per month expected to be adjusted to 165,000-200,000 jobs per month. Nonetheless, the Goldman Sachs team were prompt to emphasize the potential inaccuracies of this revision, citing the “true” pace of employment growth during that period to be closer to 200,000-240,000 jobs per month.
The potential ramifications of these revised job growth figures on the cryptocurrency market are of particular interest, with the potential to impact Bitcoin price volatility. Analysts at K33 Research have published a report highlighting the likelihood of a Bitcoin Short squeeze, which could result in sharp rallies in the world’s largest crypto asset.
K33 Research has been closely monitoring Bitcoin derivatives data, particularly the BTC funding rate for the perpetual futures, to predict bullish or bearish momentum. The recent decrease in the seven-day average annualized funding rate to minus 2.5% has given rise to concerns, with analysts noting the setup is conducive to a short squeeze.
Additionally, the increase in notional open interest in the perpetual market over the past week, combined with a negative funding rate, has piqued the interest of experts. This combination is viewed as relatively uncommon and has the potential to precipitate significant market movements.
The convergence of these factors has prompted a sense of caution for Bitcoin bears, with the potential for an unexpected short squeeze to trigger unforeseen rallies. As the US jobs data and Bitcoin market dynamics continue to unfold, all eyes will be on the developments to discern the implications on the global financial market and cryptocurrency landscape.
Post Comment