As financial markets brace for Wednesday’s influx of U.S. economic data, including the much-anticipated jobs report, the cryptocurrency sphere—particularly Bitcoin (BTC) traders—might need to tread cautiously. Despite expectations of a bleak portrayal of the U.S. economy, a leading investment bank cautions that this pessimism could be overstated.

The U.S. Bureau of Labor Statistics (BLS) is set to unveil its preliminary estimate for the benchmark revision of nonfarm payrolls, covering the period from April 2023 to March 2024. Typically, this report is released during the summer or fall, offering a retrospective adjustment to previously reported job growth figures. Analysts suggest that the upcoming BLS update may reveal that employment growth over the past year was slower than initially estimated.

SignalPlus, a tech firm dedicated to democratizing crypto options, highlighted in its market update on Tuesday that the Federal Reserve would soon receive these revised job growth numbers. The revisions may indicate that job creation from the previous year through early 2024 was weaker than previously reported, a sentiment echoed by Morgan Stanley.

Morgan Stanley anticipates a significant downward adjustment, estimating payroll figures could be reduced by 600,000, which translates to a cut of approximately 50,000 jobs per month for the 12 months ending in March 2024. This substantial revision could stoke recession fears, prompting investors to retreat from riskier assets—including cryptocurrencies—and seek refuge in safer investments, much like the market reaction following the July jobs report.

However, Goldman Sachs advises caution against taking these revisions at face value. According to a note from Goldman Sachs’ Economics Research team dated August 16, nonfarm payroll growth averaged 250,000 jobs per month between April 2023 and March 2024. While the upcoming revision may lower this figure to 165,000-200,000 jobs per month, Goldman Sachs contends that this adjustment could be partially inaccurate. The team argues that the true pace of job creation during this period likely ranged between 200,000 and 240,000 jobs per month.

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The discrepancy, they explain, stems from the data’s reliance on the Quarterly Census of Employment and Wages (QCEW), which in turn draws from unemployment insurance records. These records do not account for undocumented workers, a group that has significantly contributed to job growth in recent years.

Following the release of the BLS data, attention will quickly shift to the minutes from the Federal Reserve’s July meeting, scheduled for release at 18:00 UTC. According to a note from Morgan Stanley dated August 18, the minutes could provide insight into the Federal Open Market Committee’s (FOMC) deliberations on monetary policy. Analysts will be particularly interested in understanding why the FOMC opted to delay considering an easing of monetary policy until September and whether a 50 basis point rate cut was discussed.

As the market prepares for potential volatility, Bitcoin traders and investors across various asset classes should remain vigilant, recognizing that the forthcoming data could present a skewed picture of economic health, thereby influencing market sentiment in unpredictable ways.