Market Updates

Bitcoin price analysis: Impact of Trump-Harris debate, labor data

Published: Sep 10, 2024

The data the market is more susceptible to react to is the Jobless Claims data on Thursday. Markets are closely looking for any signs of the labour market weakening more materially. An upside surprise in Jobless Claims would indicate this. However, the current expectation is for Jobless Claims to come in at 230k, the same as last month's figure.

This week's data

The key data point this week is the Inflation data on Wednesday. The expectation is for headline Inflation YoY to come in at 2.7%, below last month's 2.9% figure. Core Inflation YoY is expected to come in the same as last month, at 3.2%. Markets are unlikely to materially react to the data unless there is a major upside surprise, which would likely result in risk assets selling down slightly.

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

Tonight's debate between Trump and Harris

This evening, we have a debate between Trump and Harris. Currently, polls have the election odds as relatively close in the swing states, with it being the case that less than a million people might decide the swing states votes. Trump and Harris will be looking to appeal to these people this evening.

The last debate (between Trump and Biden), was very consequential, with Biden stepping down after an abysmal performance. If Trump is to "win" tonight's debate, that'll increase his odds of winning and we may see a slight return of the Trump trade. This would see Crypto assets get a bid this evening - if Trump comes out of it on top.

Labour market data not enough for 50bps in September

Last week, we had the release of the labour market data. Non Farm Payrolls came in at 142k whilst the Unemployment Rate ticked lower to 4.2% from 4.3% (this was more due to rounding up and down in the figures). 142k jobs added is positive and therefore the markets have dialled back their expectations for a 50bps Interest Rate cut in September to now just at 29%, however, 113 bps of cuts are priced in for 2024, meaning a 50bps cut in November (post Election) is being priced in.

However, if the economic data continues to hold up - growth remains positive and above 2% whilst the labour market doesn't weaken much from here, then 113 bps of cuts might be too much for 2024, and the FED might just lean in to doing 25bps x 3 in 2024, so a total of just 75bps. The result of this would be Bond Yields rebounding up slightly, particularly the 2Y, whilst the Dollar Index ($DXY) would also move higher in the short-term.

US 2Y bond yield:

US Government Bonds 2YR yield chart showing price movement and RSI indicator, with potential bullish or bearish directions.

$DXY:

US Dollar Index chart displaying price action and RSI, with potential upward and downward trend projections for future movement.

The result of this would likely be that risk assets (Equities and Crypto) continue to struggle in the coming month or so.

BTC:

Bitcoin price analysis with support and resistance levels, showing RSI and potential price breakout or retracement scenarios.

Cryptonary's take

Our expectation over the coming weeks, maybe all the way up until late October, is that the equity market might be vulnerable to further downside. Crypto has had substantial downside already so it therefore may just be range-bound in this lower range between $52k and $58k.

Yesterday, as we expected and called for in our Market Direction post (although it happened very quickly), BTC tagged the $58k area and for now, has rejected from there. We're now expecting price to pull back from here and potentially consolidate, although we're open to the view that if Trump trounces Kamala this evening, that we can see Crypto push up slightly further from here.

But, we don't see major upside from current price levels in the immediate term. Therefore, the actions we're taking is to remain in Spot positions. I (Tom) personally have some trading wallets, which are solely in cash and have been for some time. This is despite the fact I still fully hold all the Spot positions of the barbell portfolio (BTC, ETH, SOL, WIF and POPCAT).

Now, these trading wallets, I'll look to put that USDT to work if prices break down, ie, if there is a quick move for BTC sub $52k, say down to as low as $48k (I'm not sure we really go lower than that). I want to remain exposed but I also want to have some USDT to go to take advantage of any panic we may get, not that we're expecting any major panic on the horizon.