The US labor market is in even worse shape than expected, with the number of jobless claims coming in at a record 6.6 million, about twice already dire estimates. [The Wall Street Journal] After teetering on the edge, stocks are surprisingly holding their own at the moment on good news out of the oil patch. Meanwhile, Bitcoin never flinched, continuing to trade independently and rallying approximately 6% at last check.
What may be difficult to fathom is that the millions of jobless claims, which are an indication of layoffs, occurred in a single week in March, not the entire month. More than 6 million Americans sought unemployment benefits from the government last week alone.
On Friday, we will learn what the damage was when the March unemployment report is unveiled. Meanwhile, today’s jobless data brings the combined two-week tally for jobless filings to 10 million, as Mati Greenspan, Founder of QuantumEconomics.io, pointed out.
More pain to come for stocks, but what about Bitcoin?
If there’s one thing the markets don’t like, it’s uncertainty, and the economy is plagued with more than its share of it at the moment. It’s a time for safe-haven assets like gold to bridge the gap, and today the precious metal is doing its job with 1% gains to buoy the price beyond $1,600/oz.
What cryptocurrency investors want to know, however, is how the Bitcoin price is reacting to the turmoil in the economy and whether it’s trading in lockstep with stocks. So far, BTC is holding its gains that have been building over the past few days, which is a good sign, stock market gains notwithstanding. Economist and trader Alex Krüger suggests BTC has oil to thank for today’s gains.
Still, Bitcoin was pumping going into the oil rebound. If BTC can continue to rally, it will be an indication that the digital gold is getting stronger. The next 24 hours will be crucial in determining its resilience to the economic fallout. BTC trading volume is similar to where it hovered last month.
For his part, Greenspan is treading carefully in the stock market, where he also trades, suggesting in a tweet that there is more pain to come for stocks. He is scooping up more precious metals and oil while also stacking sats.
“Yup. I”m short on indices for the short term as well. Too much pain around the corner, especially with the worst earnings season ever in about two weeks. Also buying Gold, Silver, BTC, and Crude Oil.”
Fundstrat Co-Founder Thomas Lee points out that historically, the stock market finds a bottom up to a month prior to peak jobless claims. So there could be a silver lining for stocks.
BTC: Q1 vs. Q2
As Twitter account Skew points out, Bitcoin is coming off of a brutal Q1, in which it shed more than 10% of its value. By way of comparison, the BTC price gained 10% in Q1 2019. For the most part, however, Q1 has been rough going for the flagship cryptocurrency, having posted double-digit percentage declines in 2014, 2015, 2016 and 2018 as well.
As for Q2 2020, things could be looking up if Bitcoin’s latest reaction to the fallout from the economic shutdown is any indication. As BeInCrypto previously reported, Q2 is typically bullish for the Bitcoin price. All eyes will certainly be on the cryptocurrency market between now and Friday, when the market-moving monthly jobs report is released.