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.

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This is a Market Pulse laying out how we see the market going into tomorrow's labour market data.

Data:

• Non-Farm Payrolls: Forecast 45k,
• Unemployment Rate: Forecast 4.6%,

What's Being Released?

On Friday 9th, the BLS will release the eagerly anticipated labour market data.

The forecasts are for the Unemployment to remain unchanged at 4.6% and for Payrolls to come in slightly softer (than last month) at 45k jobs added. However, on Wednesday 7th (yesterday), we had JOLTs Job Opening come in at 7.146m, well below the 7.7m forecast, i.e., American employers are advertising fewer job openings. Should JOLTs be a clue into Friday's data, perhaps we see a slight downside surprise i.e., higher Unemployment, lower Payrolls.

What We Expect?

Ultimately, we expect the numbers to show job growth, even if it's small, and for Unemployment to be in the mid-4 per cent range, which we don't believe will change market pricing. Unless we see a meaningful downside surprise, markets will still be looking at the Fed's late-January Meeting to be a 'pause', i.e., hold rates where they are.

The market is currently pricing an 86.2% chance that the Fed will remain on hold (do not cut rates) in January; however, the market is pricing a 39.4% chance of a rate cut at the mid-March Meeting.

Should the numbers come in as forecasted, then the market can take these numbers in its stride. Remember, the market is only pricing 2 rate cuts this year. So, expectations for more cuts are low, and therefore, more cuts aren't needed for the market to move higher.

Current BTC Positioning:

Going into the print, Crypto bounced into major resistance: BTC at $94k, which was then met with two days of relatively large ETF outflows. This isn't great, and this is a dynamic we'd like to see change. And it absolutely can, should we see the labour market data come in as forecasted, and the market can clear past this event.

BTC has now pulled back, and it's testing the $90k support level. For the price to continue higher, we see the $89k-$90k area as a key level to hold. If not, then there's a stronger likelihood that $84k will be revisited.

For now, our view is that $89k-$90k can hold, and the price can retest $94k. That'll be the decision point. Should $94k be revisited, then we'd want to see a healthy improvement in the metrics: Long-Term Holders easing up on selling, strong ETF inflows, etc.

Cryptonary’s Take:

BTC broke out and retested the key $94k level; however, it has been met with meaningful ETF outflows and a Coinbase Premium that has gone increasingly negative. Should tomorrow's labour market data come in as forecasted, then we believe this can be a market-clearing event, the market can move past it, and we can potentially see a return to positive inflows that can help price retest $94k again.

For now, we're off the view that $94k can be retested again, and that'll be the key decision point for price. However, should the metrics (ETF Flows, Long-Term Holder selling, negative Coinbase Premium) not improve, and BTC lose the $89k level, we would then be of the view that a retest of $84k is the most likely outcome.

Either way, we're well-positioned to take advantage of a move back up to $94k, or to be more patient, wait for lower and play another bounce play, similar to last week's SOL Long at $125.

Peace!