Bitcoin Slides 2% Following US Jobs Data Release Amidst Rising Speculation of Fed Rate Hike

Bitcoin faced a sudden retest of the $27,000 mark around the Wall Street opening on October 6, driven by unpredictable U.S. employment data that sent shockwaves through the markets. According to data from TradingView, BTC experienced a 2.1% drop in just one hourly candle.

However, a subsequent rebound allowed bulls to recover those losses, refocusing attention on the $27,700 range, which was of interest prior to the release of the employment data. The market turbulence was triggered by the U.S. non-farm payrolls (NFP) report for September, which exceeded expectations with 336,000 jobs added, compared to the anticipated 170,000.

This robust jobs report underscored the labor market’s resilience to the Federal Reserve’s measures, such as interest rate hikes, designed to counter inflation. Despite the positive data, it was perceived as negative for risk assets, including cryptocurrencies. Traders like CrypNuevo noted that the market interpreted the data as a potential threat for another 25 basis points hike by the Fed during the November meeting of the Federal Open Market Committee (FOMC). Data from CME Group’s FedWatch Tool indicated a shift in probabilities, raising concerns among investors.

Furthermore, the Consumer Price Index (CPI), a key inflation indicator for Fed policy, is anticipated to provide a clearer picture of the economic landscape. Amidst these developments, financial commentary sources highlighted the pressure mounting on both the markets and the Fed itself. The expected Fed pause, originally projected until June 2024, is now speculated to extend until July 2024, leading to a sharp decline in market futures immediately after the employment report was released.

Analyzing Bitcoin’s response, traders observed a decline in Bitcoin open interest (OI), indicating a shift in market dynamics. The reduction in OI suggested a move towards more average and stable levels, relieving the market of excessive volatility. However, traders remained cautious, awaiting the Fed’s tone and posture before reassessing the probabilities of future market moves. The uncertain economic landscape continues to challenge both traders and policymakers, adding complexity to decision-making in the financial markets.

For more news, find me on Twitter or subscribe to my YouTube channel.

What is your opinion on this issue? Leave me your comment below! I’m always interested in your opinion!

Leave a Reply

Your email address will not be published. Required fields are marked *

Recommended for you