Bitcoin price dives 2% on US jobs data as Fed rate hike bets heat up in the Web 3.0 era.
Bitcoin price dives 2% on US jobs data as Fed rate hike bets heat up

At the Oct. 6 Wall Street open, Bitcoin (BTC) saw a snap retest of $27,000, as the release of United States employment data created turbulence in the markets.

Analysis: Jobs data “not what Fed wanted to see”

Cointelegraph Markets Pro and TradingView reported that Bitcoin dropped 2.1% in one hour following the release of the U.S. non-farm payrolls (NFP) figures, which came in almost double the 170,000 expected. Despite the resilience of the labor market to the Federal Reserve’s counterinflation measures, the news was seen as a negative for risk assets, including crypto.

Popular trader CrypNuevo commented on this, noting that the market interpreted the data as a potential threat for a 25 basis points hike in the November 1st Federal Open Market Committee meeting. Data from CME Group’s FedWatch Tool showed that the probability of a rate hike had increased from 31.3% to 25%.

The Kobeissi Letter commented that the pressure was on both markets and the Fed, as projections for rate tweaks suggested that the Fed pause was now expected until July 2024, rather than June 2024.

The Consumer Price Index (CPI), being one of the key inflation indicators for Fed policy, will also be taken into account.

Bitcoin open interest drains

Looking at Bitcoin’s reaction, popular trader Skew spotted spot and derivatives traders exiting on the NFP print.

Analyzing data from Oct. 6, Daan Crypto Trades pointed out the declining Bitcoin open interest (OI). This had previously triggered spurts of both upside and downside volatility.

“That’s another $600M in Open Interest lost since yesterday’s high. We are getting back to more ‘healthy’ levels,” he summarized.

In the meantime, a prognosis for Fed action read: “Slight probability shift on Nov 1 towards a hike but still unlikely.”

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