Bitcoin Hits $40,000 Amid U.S. Employment Data Stirring Interest Rate Speculation
Summary:
Bitcoin (BTC) reached $40,000 after U.S. employment data lead to market speculation about potential interest rate cuts. Despite varying economic factors and the reactions of other assets like gold, BTC managed to remain resilient, exhibiting an ongoing upward trend. The attention is also turning towards altcoins like Ethereum (ETH) and Solana (SOL) which are outperforming Bitcoin.
Bitcoin (BTC) touched the $40,000 mark after the U.S. job market data released on Dec. 8 sparked speculation about future interest rate cuts. Information from Cointelegraph Markets Pro and TradingView detailed the BTC's recent performance, which was influenced by economic indicators like U.S. inflation.
Nonfarm payroll data exceeded predictions with 199,000 as compared to the anticipated 190,000, and unemployment stood lower than expected at 3.7% against a prediction of 3.9%, as per the U.S. Bureau of Labor Statistics. These figures suggested that the full effect of the Federal Reserve's monetary policy tightening isn't visible yet. The market responded nervously to these labor numbers even though some indicators pointed to a decrease in inflation.
Post the jobs report announcement, the possibility of beginning interest rate cuts shifted from March 2024 to May 2024. Prior to this report, the market estimated a 60% probability of rate cuts starting from March 2024. The chances of rate cuts initiating in January 2024 reduced from 16% to 6%.
However, according to the data from CME Group’s FedWatch Tool, the likelihood of anything other than maintaining the status quo on the rate change at the upcoming Fed meeting is practically negligible.
The U.S. dollar index saw notable fluctuations following the jobs data release, soaring to its highest since Nov. 20 and then erasing the gains to settle at 103.8 at the time of reporting.
Despite a decline in faith on forthcoming interest rate reductions, Bitcoin managed to stand firm, unlike gold which slumped by 0.8%. The value of Bitcoin remained within the multiple-day trading range as market players looked for signs of a trend continuation.
"As of now, Bitcoin is holding strong in its upward trend despite recent fluctuations and has considerable backing around $43k," noted analyst Matthew Hyland.
Daan Crypto Trades, a crypto trader and analyst, also pointed out substantial areas of liquidity around the spot price.
Meanwhile, attention remains focused on altcoins like Ethereum (ETH) and Solana (SOL) outperforming Bitcoin. Michaël van de Poppe, founder and CEO of MN Trading, suggested expecting an exciting couple of months ahead for altcoins.
This article does not offer investment advice or recommendations. Each investment and trading decision involves risk and readers are encouraged to research and evaluate their choices independently.
Published At
12/8/2023 6:46:28 PM
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