Weakness in virtual assets continues… Eyes on FOMC minutes and employment data

The virtual asset (cryptocurrency) market has been unable to escape its weak trend. Market participants view the Federal Open Market Committee (FOMC) minutes, to be released on the 20th, and U.S. employment data as key variables that will determine future price direction.

Bitcoin recently fell below the $95,000 level intraday, marking a six-month low. With major economic indicator releases postponed one after another due to the shutdown, the U.S. Federal Reserve (Fed) has fewer grounds on which to judge whether to cut rates, and investor sentiment has contracted. Concerns over an artificial intelligence (AI) bubble have compounded the situation, increasing overall caution toward risky assets.

Differences of opinion within the Fed over rate cuts are widening. Markets had initially expected consecutive rate cuts at the December FOMC, but recently hawkish (favoring tightening) members have said "further cuts should be approached with caution," shifting the tone. What judgments were exchanged amid the data gap is expected to be revealed by the release of the minutes.

The U.S. September employment report to be released that day is also cited as a variable that could sway market direction. The Bureau of Labor Statistics (BLS) will publish the September unemployment rate and nonfarm payroll figures. These were indicators postponed just before the shutdown, and as the first data to assess the health of the U.S. labor market, they are drawing investor attention. If the employment data are stronger than expected, expectations for rate cuts could be further reduced.