On June 7, the cryptocurrency market, including Bitcoin (BTC), Ethereum (ETH), and various altcoins, experienced a significant downturn following the release of stronger-than-expected U.S. employment data. Despite this initial dip, many traders remain optimistic, viewing it as a temporary “shakeout” before the market resumes its upward trend.
A notable crypto trader, known as il Capo of Crypto, with 848,000 followers on X (formerly Twitter), observed that the market saw a strong sell-off into support levels, with altcoins suffering more than major cryptocurrencies like Bitcoin and Ethereum. This sell-off aligns with what is often referred to as a “shakeout,” where a large number of investors sell off their holdings simultaneously, typically triggered by market or economic uncertainties.
The sell-off occurred in conjunction with the release of the U.S. Employment Situation Summary Report, which indicated a higher-than-expected increase in jobs for May. This contradicted the expectations of some crypto analysts who had predicted that weaker employment data might pressure the Federal Reserve to consider lowering interest rates, potentially driving Bitcoin to new highs.
Markus Thielen, head of research at 10x Research, had speculated on June 5 that a weaker employment report could lead to rate cuts. He suggested that if the Consumer Price Index (CPI) for the year-on-year rate was 3.3% or lower, it could push Bitcoin to all-time highs. However, the actual employment data provided a different narrative. Thielen explained that the U.S. employment data presented mixed signals, with the unemployment rate climbing to 4.0% despite an increase in the number of jobs added, primarily attributed to a rise in part-time workers.
The U.S. Bureau of Labor Statistics reported an increase of 272,000 jobs in May, while the unemployment rate edged up by 0.1%. This mixed data contributed to a complex economic outlook, leading to uncertainty in the crypto market.Despite the broader market downturn, Bitcoin remained relatively stable over the past 24 hours, settling at $69,534.4. Ethereum experienced a slight decline, dropping by 0.53% to $3,669. Over the past week, altcoins faced steeper losses, with Pepe plunging 18%, Solana falling 3.7%, and Dogecoin tumbling 10.7%, according to data from CoinMarketCap.
The overall sentiment in the cryptocurrency market is that this downturn may be temporary, with many traders and analysts anticipating a rebound once the market digests the recent economic data and adjusts to the new economic landscape.
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