Bitcoin falls from USD $71,000 after positive employment figures in the US

By Hannah Perez

Bitcoin sank as low as $68,500 before recovering modestly following the stronger U.S. jobs data reading.

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Bitcoin slipped below $70,000 following US jobs report
Stronger hiring data dampened interest rate cut expectations
Traders continue to wait for the US Federal Reserve to ease monetary policy
Almost USD $300 million of liquidations occurred amid the crypto market slide

Bitcoin has lost the week’s gains, retreating from the newly recovered area of USD $71,000 after the publication of US labor data for the month of May.

The U.S. economy added 272,000 jobs last month, beating estimates of just 185,000 and well above April’s 165,000, the U.S. Department of Labor reported Friday.

The unemployment rate rose from 3.9% to 4%, marking the first time it has seen such a low figure in more than two years, it reported. cnn. They were also seen Stronger-than-expected wage increases during May, lifting average hourly wages to 4.1% year over year, reversing a months-long cooling trend.

In addition to defying slowdown predictions, the unexpected surge in hiring also appeared to create uncertainty among investors, who now appear less confident that the Federal Reserve (FED), the US central bank, will announce a long-awaited rate cut. interest.

The US central bank has sharply raised interest rates from 2022 to combat inflation, a decision that dampened investors’ appetite for risk assets —including cryptocurrencies. Observers have been expecting the FED to announce a rate cut this year, but officials are still undecided.

While inflation has slowed over the past two years, progress has stalled in recent months. The most recent reading, for April, put inflation at 3.4% annually, elevated compared to the Federal Reserve’s 2% target and slightly above the 3.1% seen at the beginning of the year.

This week’s decision by the European Central Bank (ECB) to cut interest rates by a quarter point, the first cut in benchmark rates since 2019, had raised expectations that the US could be next. The cut in the euro zone came despite forecasts of persistent inflation and after similar announcements of monetary easing by central banks in Canada, Sweden and Swiss.

However, recent stronger U.S. jobs data has dampened this outlook.

“This report means the Federal Reserve will leave interest rates at their current high level for a few more months.“said Ian Shepherdson of Pantheon Macroeconomicsas cited by BBC.

Bitcoin slides to USD $69,000

Bitcoin (BTC), the main cryptocurrency by market capitalization, responded immediately to the news, registering a notable price decline after having fluctuated close to USD $72,000 in the morning hours (EDT).

The data from CoinMarketCap show that BTC revisited lows of USD $68,507 this Friday before recovering modestly in a drop of 2.5% on the day, although still with a gain of almost 3% on the week. The rest of the cryptocurrency market replicated the bearish trend, causing the global capitalization to fall by 3.8% in the last 24 hours.

The digital asset market crash caused a cascade of liquidations of long positions for nearly USD $300 millionas revealed by the data from Coinglass. Bitcoin alone faced long liquidations of almost USD $40 million in the last hour, according to the same data source.

Liquidations occur when a service provider forcibly closes a trader’s leveraged position due to margin shortfalls. In other words, traders’ positions are liquidated when they lack sufficient funds to keep said trade open, and it occurs when market movements disfavor the trader’s bet.

Bitcoin changes hands around USD $69,000 at the time of publication.

Article by Hannah Estefanía Pérez / DailyBitcoin

Picture of Unsplash

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