Friday’s NFP release will be a pivotal event in shaping market sentiment and determining the near-term trajectory of Bitcoin and other cryptocurrencies, according to Bitfinex analysts.

In a statement to CryptoPotato, the macroeconomic dynamics, including the ECB’s rate cut and the potential for increased liquidity, add further complexity to the equation, making it crucial for market participants to closely monitor these developments and their potential impact on the crypto markets.

Several Factors at Play

Bitfinex analysts have shared their perspectives on how the NFP data and the recent European Central Bank (ECB) rate cut might influence the crypto markets.

According to the cryptocurrency exchange, if the NFP report meets or falls short of expectations, it could confirm concerns of an economic slowdown, possibly causing greater market volatility.

Bitfinex analysts suggest that a positive reaction from equity markets, fueled by expectations of continued monetary easing, could spill over into the crypto market. This could potentially help Bitcoin secure a weekly close above the psychological resistance level of $70,000.

However, if the NFP data significantly exceeds expectations, it could signal a stronger economy, potentially leading to fears of tightening monetary policy. This, in turn, might put downward pressure on Bitcoin as investors rebalance their portfolios towards traditional assets.

ECB’s Growth-Boosting Rate Cut Could Lift Bitcoin

In addition to the NFP data, Bitfinex analysts believe that the ECB’s recent decision to implement its first rate cut in five years, lowering the rate to 3.75%, could also impact the crypto markets.

This move aims to stimulate economic growth amid signs of a slowdown in the Eurozone. According to Bitfinex analysts, the rate cut could weaken the euro, potentially leading to higher demand for alternative risk assets like Bitcoin.

“Friday’s NFP release will be pivotal in shaping market sentiment. A weaker-than-expected report might boost Bitcoin due to anticipated monetary easing, helping it aim for a weekly close above $70,000. On the other hand, a stronger report could exert downward pressure as investors might foresee tighter monetary policies.”