The latest US jobs data has shaken the crypto market, causing a sudden and significant drop in the prices of bitcoin and most altcoins. The news, which surprised many investors, calls into question hopes of an imminent interest rate cut by the Federal Reserve.
The direct impact of data on employment
Yesterday's release of US employment data triggered a sharp fall in the prices of major cryptos. After a slight decline of 0.48% on Thursday, the price of Bitcoin fell by 2.05% on Friday, reaching $69,326, compared to $70,771 the day before. This sharp decline reflects growing uncertainty and the market's rapid reaction to economic news.
Ethereum, the other flagship crypto, was also heavily impacted, with a drop of 3.56%. Solana was not spared, recording a drop of 4.49%. The same coins, which had recently performed well, suffered even greater losses. PEPE fell by 10.49%, Floki by 11.87% and WIF by 11.58%. In short, the entire crypto market was affected by this economic news.
Furthermore, the market fall led to massive liquidations of long positions, totaling $360 million.
Reactions from Bitcoin investors
Employment data released by the United States Department of Labor showed the creation of 272,000 jobs in May, well above the 185,000 expected and the 165,000 the previous month. This significant increase in employment was accompanied by an increase in the unemployment rate to 4%, a level last reached in January 2022.
Faced with these figures, investors quickly reacted by anticipating that the Federal Reserve would not reduce interest rates in the near future. This prospect triggered rapid profit-taking in bitcoin and other cryptos. Indeed, data indicates that the economy remains robust despite rising unemployment, limiting the chances of a rate cut by the Fed at the next scheduled meeting of the Federal Open Market Committee (FOMC). on June 12.
Lower interest rates are seen by bitcoin investors as a potential catalyst for a bull market, as they could increase demand and liquidity by reducing borrowing costs. However, recent employment figures show an economy strong enough to warrant maintaining current rates or even more restrictive monetary policy, which has contributed to the fall in crypto prices.
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