Key Points
- Bitcoin’s price fell below $71k following a stronger than expected May U.S jobs report.
- Market watchers are now focusing on the upcoming Federal Reserve meeting next Wednesday.
Bitcoin’s price experienced a sharp drop, falling below $71k during New York’s early trading session on Friday. This was in response to the May U.S jobs report which exceeded expectations.
The report revealed that 272k jobs were added in May, significantly above the projected 190k. However, unemployment rates reached 4%, slightly higher than the anticipated 3.9%.
Impact on Federal Reserve’s Decisions
While the job report was good news for workers, it complicated the chances of the Federal Reserve reducing interest rates in their June meeting. The jobs report is a crucial factor that the Federal Reserve considers when deciding on its monetary policies.
A weaker report could increase the chances of rate cuts. However, a strong report, like the one in May, could sway the Federal Reserve to be more aggressive.
Scott Melker, known as ‘The Wolf of All Streets,’ commented on Bitcoin’s reaction to the report, stating that Bitcoin’s price dropped due to the high number of employed people, which decreases the chances of rate cuts.
Future Expectations for Bitcoin
The focus is now on the Federal Reserve’s upcoming announcement next Wednesday. According to the CME Fed watch tool, 99% of interest rate traders expect the rates to remain the same.
Therefore, market watchers are eagerly waiting for Fed chair Jerome Powell’s press conference to see whether the agency will adopt a dovish or hawkish stance.
Many analysts believed that the U.S Jobs report would play a vital role in determining Bitcoin’s future price direction. Quinn Thompson of crypto hedge fund Lekker Capital stated that the market needs assurance that Powell will cut rates in July.
The European Central Bank (ECB) and Bank of Canada (BOC) have already cut their interest rates, raising bullish expectations and potentially initiating global quantitative easing.
However, the latest U.S job report complicates this. Charles Edwards, founder of crypto hedge fund Capriole Investments, believes that rate cuts are inevitable in the long run.
Currently, there is considerable liquidity above $72k, which could influence price action. However, Bitcoin’s price may continue to fluctuate until the Federal Reserve meeting next week.
