Bitcoin and other high-risk assets may benefit from a deteriorating job market and increasing unemployment in the United States, the largest global economy.
The unemployment rate in the US unexpectedly rose to 4.1%, surpassing the previously predicted 4.0%, and reaching its highest level since December 2021.
According to the Bureau of Labor Statistics’ nonfarm payroll data published on July 5, the US economy added 206,000 jobs in June. Although this figure is higher than the anticipated 191,000, it is significantly lower than the 272,000 jobs added in May, which was later revised to 218,000.
Jag Kooner, the head of derivatives at Bitfinex, believes that a weakening labor market in the US could positively impact the price of Bitcoin (BTC), as he stated in an interview with Cointelegraph.
Bitcoin’s price has been stuck in a downward trend for over a month, falling below the significant $60,000 mark.
On July 5, Bitcoin experienced a drop of over 10.5% within a 24-hour period, reaching a four-month low of $53,550. According to Bitstamp data, the last time Bitcoin traded at this level was in February 2024.
Despite concerns from some traders that the bull cycle has ended, other analysts, including popular analyst Rekt Capital, see the current correction as consistent with previous Bitcoin corrections.
Institutional inflows from US spot Bitcoin exchange-traded funds (ETFs) have also been lagging behind. According to Dune data, US ETFs are expected to record their third consecutive week of net negative inflows, with cumulative net outflows of over $315 million so far this week.
However, Kooner suggests that Bitcoin ETF flows could potentially increase if the weakening labor market leads to expectations of an interest rate cut.
On the other hand, Kooner also highlights a recent lack of inflows and “dip-buying” purchases.
The question remains: Could a financial crisis bring an end to the cryptocurrency’s bull run?