On Friday, the cryptocurrency market turned down after the release of employment data by the US Department of Labor, which was higher than expected. Bitcoin experienced a short-term volatility of 4% during the trading session, dropping to around $66,000 at one point before bouncing back above $67,000 at the time of writing. Ethereum hit a daily low of $3,214 and slightly recovered to over $3,340 during the closing period. Among the top 200 tokens by market capitalization, only 20 saw an increase in value.
Yield Guild Games (YGG) saw the highest increase, rising by 20.71%, followed by NEAR Protocol (NEAR) with an 8.6% increase, and Toncoin (TON) with a 7% increase. The meme coin cat in dogs world (MEW) experienced the largest decline, falling by 27.7%, followed by Aragon (ANT) with a 20.3% decline, and Biconomy (BICO) with a 19.4% decline.
In the traditional market, major US stock indices opened higher and continued to rise. The Dow Jones Industrial Average closed up 307 points, the S&P 500 index rose by 1.1%, and the Nasdaq rose by 1.2%. The yield on the 10-year US Treasury bond increased by 6.5 basis points to 4.38%, and the US dollar index rose by 0.5%.
The uncertainty surrounding interest rate cuts has caused volatility. Investors are concerned about the rising prices of commodities and the potential interest rate cuts by the Federal Reserve. On one hand, they hope for a strong economy to support further growth in corporate profits, while on the other hand, they hope for a weak job market to give the green light for the Fed to begin cutting rates.
According to the data from the Department of Labor, the US economy added 303,000 new jobs in March, far exceeding the expected 212,000. The unemployment rate in March dropped to 3.8%, slightly lower than the economists’ predicted 3.9%. The employment data for February also unexpectedly increased, adding 275,000 jobs, while economists had previously predicted only 198,000.
Some Federal Reserve officials have indicated that strong economic data could lead the central bank to pause its rate-cutting plans. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said on Thursday that if inflation remains high and the economy continues to show signs of growth, the central bank may choose not to cut rates at all, which has shocked the market.
The employment report is just one of the many data points the Federal Reserve is watching. Noelle Acheson, author of Crypto is Macro Now, stated in her market update that “we must remember that these indicators only give us a small glimpse of the bigger picture.”
The latest data from the CME FedWatch tool shows that the possibility of a rate cut in 2024 has been further pushed back to the end of the year. As of the time of writing, the possibility of a rate cut in June is slightly higher than 50%, a 10% decrease from earlier this week.
Bitcoin and Ethereum have had a slow start to the second quarter, with both declining by around 6% and 10% respectively since the beginning of this month.
Secure Digital Markets analysts stated that “Bitcoin is currently forming a symmetrical triangle pattern, hovering in a directionless position. This momentum is expected to push us towards a recent peak of $72,000 after a rebound from near $64,500, close to the lower edge of the trend triangle.”
The analysts added, “With strong inflows into the ETF market and anticipated supply shocks on the horizon, it seems possible to break this pattern in the short term and set new all-time highs. As for the trend of ETFs, the situation remains bullish, with net inflows reaching $106.8 million, while Grayscale’s outflows are relatively moderate at $79.3 million.”
Sergei Gorev, risk manager at the financial technology platform YouHodler, stated that Bitcoin is still in a consolidation phase before the upcoming halving, when the mining reward for each block will be reduced. He stated, “It is clear in the market that investors who bought Bitcoin at lower prices are now taking profits. However, there are still many cryptocurrency enthusiasts waiting for a price drop to make further purchases.”
Gorev believes that there are currently no major negative factors in the cryptocurrency market that could end the seven-month upward trend of Bitcoin in April.
Others are more optimistic. Will McDonough, founder of the commercial bank Corestone Capital, pointed out that spot Bitcoin ETFs have lowered the entry barriers for many people to enter this asset class. He expects this trend to expand as major brokerage firms start allowing allocations to such products, and a new group of high-net-worth investors will enter the field at the same time as the Bitcoin halving in a few weeks.
McDonough stated in an interview with Bloomberg, “I expect the price of Bitcoin to easily reach six figures (at least $100,000) by the end of this year. Unless there is a lot of information about banning blockchain during the US election, I don’t think there is anything that can stop this momentum.”
Author: BitpushNews Mary Liu