The second-largest cryptocurrency by market capitalization, Ethereum, was last down just under 2.0% on Friday in the $1,210 zone. It rejected a test of the late June highs at $1,280 earlier in the session. But in the past 24 hours, ETH/USD is still trading up around 2.5%.
Both Bitcoin and Ethereum have seen double-digit gains so far this week, boosted in tandem with strength in the US (and global stock market space). According to its pre-open futures price, the tech-heavy Nasdaq 100 index is on track to gain just under 4.0% this week.
Over the past few quarters, cryptocurrencies have developed a close relationship with US tech stocks. Both are considered highly speculative assets that suffered in 2022 as economic uncertainty increased and central banks moved to tighten financial conditions.
All eyes on US jobs data
Crypto traders now have their sights set on the release of the official June US Labor Market Report at 12:30 GMT. The US labor market has been a source of strength for the US economy in recent months as real incomes have been hit by inflation and consumer spending/sentiment has suffered.
The US Federal Reserve will be watching the report closely. Strong job growth and low unemployment would help give him confidence in the ability of the US economy to “handle” aggressive rate hikes. The Fed raised interest rates by 75 basis points last month, the biggest hike in 28 years.
Minutes of that meeting, released this week, revealed that the Fed accelerated rate hikes on fears of a deterioration in the near-term inflation outlook. Indeed, with US inflation at multi-decade highs, the Fed (and the markets) will be looking closely at the measure of average hourly wage growth in the upcoming jobs report.
An acceleration in wage growth can lead to higher inflation down the line. The Fed thus hopes to see wage pressures ease. The best outcome for cryptocurrency markets would be a jobs report that reduces the risk of the Fed raising interest rates again by 75 basis points this month.
For more on how the upcoming US jobs report could impact crypto, click here.
Cardano (ADA) Price Prediction
The native blockchain token Cardano ADA pulled back from the weekly highs it had printed earlier in the session, alongside the selling pressure on pre-US jobs data seen in the crypto markets. ADA/USD nearly touched the $0.50 level earlier in the day. The pair is trading at $0.46, down just over 2.0% on Friday.
According to CoinMarketCap, ADA has been flat for the past 24 hours and is expected to rise around 2.5% this week. But technicians note a growing risk of the cryptocurrency breaking out of the $0.40-$0.50 range over the past few weeks.
Indeed, ADA/USD has been forming a pennant structure since mid-June. If Friday’s US jobs data triggers a broader crypto move, a breakout looks likely. A bullish breakout would be triggered when ADA/USD breaks past the previous session highs around $0.4930 and above $0.50.
This would open the door for a test of the 50-day moving average at $0.51. A break above here would likely see the late June highs at $0.5250 and $0.5450 tested. A break down would be triggered by a move below $0.45 and open the door for a quick test of the June lows in the $0.42s.