How the U.S Non-Farm Payroll Data Will Impact the Crypto Markets?

We might feel that the prices of assets change all the time

 only because of the mood of traders but this is only half true.

There are hundreds of factors that contribute to the price fluctuations of assets not only in traditional finance but also in crypto. Non-Farm Payroll Data released by the US government is one of those significant factors that impact the prices of cryptocurrencies directly. 

This CoinGabbar blog is going to dive deep into understanding why Non-Farm Payroll Data is important for crypto markets and how will it impact the markets in the coming days.

What is Non-Farm Payroll Data?

Non-Farm Payroll Data or NFP reports are released by the government of the United States of America indicating the total number of paid workers in the country excluding farm employees, the federal government, households, and NGOs.

These reports are released on the first Friday of every month by the US Bureau of Labour Statistics. These reports are critical for traders all around the USA as it facilitates them to speculate the movement of prices in Forex and USD. Any factor affecting the stock exchanges of the largest global economy affects other significant markets as well. 

Non-Farm Payroll reports are also recorded to affect the price of cryptocurrencies as they can change the market sentiments to either positive or negative. The data released on the NFP reports can act as the catalyst for global traders if a spike in the total rate of employment is recorded.

Impacts of Non-Farm Payroll Data on Cryptocurrencies

Different reasons and indicators encourage traders to define their trading strategy and the Non-Farm Payroll Data is one such indicator. If the total number of employees working in the manufacturing industry is increased, the production of goods and their sales increase consequently. This indicates a higher market demand and a higher rate of goods consumption. All this when put together ends up being a solid indicator of the direction in which the market is heading in the coming few days. 

On the contrary, if the total number of employees in the non-agricultual sectors decreases, it indicates low market demand and incites a negative market sentiment. The change in the price of stocks listed on the exchange is visible only after the first bar of the 15 minutes of the NFP reports release. 

These indicators also impact the prices of USD and the trade flow in favor or against it. The USD price eventually affects global trade and the available pool of liquidity for trading in cryptocurrencies. The positive impacts of the NFP reports push traders to invest in cryptocurrencies as crypto markets can provide remarkable returns in case of a favorable swing. 

The upcoming NFP reports can also give insight to the traders into the expected rise in the rate of interest in the next Fed meeting. Reduced rates will push the markets up while an increased rate of interest from Federal Reserves can go vice-versa.

Conclusion

The reason being the impact of the NFP report on the crypto prices lies in the fact that it pushes a narrative in the trading ecosystem. If the market swings in the favor of that narrative, visible impacts on the prices of commodities are observed. These market swings create a perfect ecosystem for trading and earning sizeable profits in the crypto industry, however, there exists no trading strategy too good to never fail. 

Today’s NFP reports are speculated to push the markets close to their resistance bar and even break free from it in case of the santa clause rally. However, we would have to wait for the reports to be released to witness their impacts.