Trader Chen Shu: Will the selling pressure on Bitcoin intensify? Will it end the downward trend with the help of the non-farm payroll tonight?

The August US non-farm employment report will be released at 20:30 tonight. This report will also determine whether the Fed will cut interest rates by 25 basis points or 50 basis points in the September interest rate decision, and will directly reveal whether the US economy has entered a recession as the market is concerned.

Last month, US employment data showed weakness, especially the unemployment rate hit a new high since October 2021, causing concerns about the US economy. This concern spread to the entire financial market, triggering a chain reaction and causing a sharp drop on Black Monday.

Fed Chairman Powell said at the August Global Central Bank Annual Meeting that he did not expect the employment report for August to continue to be weak. The rebound in the job market will not change the Fed's decision to cut interest rates in September. Excessive weakness in employment performance is not what the Fed wants to see. In addition, on August 21, the US non-farm employment figure was revised down by 810,000, which means that the employment reports in the past 12 months have been embellished, with an average monthly reduction of 68,000 jobs.

This indicates that the US economic performance is not as optimistic as the market expected. Due to the downward revision of past data, the non-farm data will no longer have much room for error, unlike the huge differences in employment data in previous months, which led to investment banks' predictions of employment becoming a mere formality. This time, the market's employment expectations are 160,000, with an unemployment rate of 4.2%. Last month, employment was 114,000, with an unemployment rate of 4.3%.

Tonight's non-farm data mainly has two aspects:

1: Data performance better than market expectations, further rebound in employment, less than 100,000 is definitely a low probability event. If it is between 110,000 and 160,000, it will cause Bitcoin to rise first and then fall. It is not as good as expected, but stronger than last month.

2: Employment data continues to be weak, even lower than last month's 114,000, and the unemployment rate rises above 4.3%. For Bitcoin, this is a positive sign. Looking at the US economic recession from a different perspective, even if Bitcoin may not rise, arbitrage trading and market selling pressure will lead to strong selling pressure, dragging down other global assets (US stocks/gold, etc.) in panic selling, and Bitcoin is no exception.

In other words, tonight, regardless of whether the employment data performs well or poorly, it should be difficult for Bitcoin to rise. Good employment performance is negative for Bitcoin, and poor employment performance indicates a hard landing for the US economy. Last month's non-farm data resulted in a small rebound in Bitcoin followed by a sharp drop for several days, right? (I'm not bearish on Bitcoin, it's just a fact. Let's wait and see how it goes!)

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