Markets
Why is the crypto market down today?
After the slight decline of 0.48% on Thursday, the bears took over Bitcoin last night. With Bitcoin price suddenly dropping 2.05% on Friday, major bullish altcoins and the entire crypto market turned 180 degrees for a major pullback.
With the Ethereum Price down 3.56% and Solana 4.49%, top altcoins are returning to the nearest support levels. The meme coin sector, which has performed well in recent weeks, has been hit hard, with top performers like PEPE collapsing 10.49%, Floki 11.87% and WIF 11.58%.
Overnight bearish reversal in crypto market erases $360 million in long liquidations, says Change machine. Meanwhile, the US Bitcoin ETFs maintaining a positive outlook with a daily total net inflow of $130.99 million, with IBIT contributing the majority of $168 million. This is the 19th positive day, but also reflects a downward trend in inflows following the second-largest daily inflow of $886 million on Tuesday.
US Jobs Reports Crash Bitcoin
On June 7, the price of Bitcoin fell from $70,771 to end the day at $69,326, an intraday decline of 2.05%. This sudden move by the cryptocurrency market leader is deeply influenced by the May US jobs report released yesterday by the Department of Labor.
The US Department of Labor presents a report highlighting the creation of 272,000 jobs last month. This is well above the expected number of 185,000 and unprecedented the previous month’s data of 165,000 jobs.
Additionally, the superpower is seeing an increase in the unemployment rate, peaking at 4%, touching January 2022 levels.
Report on How Jobs Really Influence Crypto
With the unemployment rate rising in the United States, the crypto market is responding quickly as profits begin. But why? Well, even if unemployment rises, the Fed is unlikely to cut interest rates in the near future. That could be because there are signs the economy is still strong in other areas, like job growth.
So, if the Fed decides to cut rates too soon, inflation could rise, which is already a concern.
Now why did the market fall? Simply put, the jobs data limits the chances of the US federal government cutting rates. The broader market is anticipating a rate cut at the next Federal Open Market Committee (FOMC) meeting on June 12.
Why does the crypto market need a rate cut? Well, with a potential drop in rates, the market will experience an increase in demand with lower borrowing costs and liquidity will increase. Therefore, rate cuts are the next catalysts to fuel the bull market and drive up the prices of Bitcoin and altcoins.
Will Bitcoin continue the uptrend?
After the overnight crash below the $70,000 level, Bitcoin price is slowly trading at $69,343. With no major movement in the early Asian hours, a Doji candle is visible, trying to find support.
In the 1D chart, it is visible that the Doji is trying to take support at the Fibonacci level based on the 23.60% trend. However, crypto price action shows the bearish engulfing candle formed last night, completing an evening star.
Additionally, the constant rejections from the $70,000 mark reveal a huge supply at this psychological level. The uptrending 50D EMA may soon provide dynamic support with the daily RSI holding above the midline.
Therefore, the overnight pullback is likely a rapid reaction of FUD to the employment data. The potential crypto price recovery from this project will reach $71,000 before the June 12 FOMC meeting.
Due to the recent hawkish data, the possibility of a sharp move in Bitcoin on the day of the FOMC meeting is high.
Read also: Top Four Altcoins with 100X Potential to Stack Right Now