There have been fewer job openings in the United States lately and this may, one way or another, have an impact on Bitcoin and the broader crypto market.
The recent data on unemployment in the US shows that the labor market is still predominantly strong at 3.8%.
However, the creation of new jobs is seen to drop by as much as 6.4%; with social assistance and healthcare having very low vacancies to date.
Labor demand is seen to capsize and has in fact nosedived to 1.9%.
On the other hand, the creation of new jobs in the US has been observed to spike last month by 209,000 as well as around 186,000 jobs created or a surge of 13%.
In addition, the annual pay for workers has also tipped by 7.8% for those who stayed at their present jobs, while the pay for those who change jobs increased immensely by 15.8%.
With these developments, the economy is showing no signs of slowing down contrary to what analysts say.
Rise In Unemployment: Does It Affect Bitcoin?
Despite the GDP being in the red for both Q1 and Q2, the US labor market is seen to flourish. But, the reduction in the number of job openings is a red flag that the US economy could be seeing a potential rise in unemployment cases in the next couple of months.
Bitcoin and other crypto could be affected by this trend – as they are each time the stock market plunges, although that’s another story. But, come to think of it, there could be some relation in there somewhere.
When this happens, when jobs become scarce, people will have less spending power. As a result, businesses will experience a downturn as the demand for products decreases as well.
Meanwhile, the Federal Reserve has just hiked interest rates in an effort to slow down inflation to at least 2%. With that being said, the labor market is also constricted as of press time.
Crypto immediately felt the effect following the Fed’s rate increase. So, there’s that correlation.
With people losing jobs, the economy could crash which means economic activities are derailed. When this happens, business retailers would rather hold on to their cash than invest in the markets – or they would opt to invest in extremely volatile instruments such as Bitcoin and other cryptocurrencies.
S&P 500 To Impact Crypto And Equity Markets
The plunge in the creation of new jobs is seen to be also largely connected to the price of the S&P 500. According to the charts, S&P 500 impacts new job openings which were seen in 2003, 2009, and also in 2020.
It seems that S&P 500 is experiencing a bearish movement with the sudden decline in job openings. In fact, even the inflation rate is swishing nowhere near the central bank’s target.
The Fed is tightening the reins on its monetary policy so it looks like unemployment will continue to climb in the coming days.
Bitcoin price is also closely linked to S&P 500. The charts show that both BTC and SPX have dropped at the same time as seen on December 18 and also in March 2020. It seems that both the crypto and equity markets could nosedive in the coming days.
BTC total market cap at $389 billion | Featured image from Robert Half, Chart: TradingView.com