Bitcoin Value Surges by 5% Following Disappointing U.S. Employment Data
Summary:
The value of Bitcoin increased by 5% on May 3 following the release of weaker-than-expected U.S. employment data, encouraging interest rate cut considerations. The disappointing results led to a stock market boost with Dow Jones futures surging 500 points. Experts viewed the dip from the two-month lows as temporary, expecting higher levels to reaffirm support. Meanwhile, data revealed that Bitcoin whales accumulated significant amounts in the under $60,000 area. However, investment decisions should be based on individual research due to inherent risks.
On May 3, Bitcoin (BTC) experienced a 5% increase following the release of disappointing U.S. employment data which offered a significant boost to risk assets. BTC/USD witnessed a sharp rise, surpassing the $62,000 mark on Bitstamp as per the data from Cointelegraph Markets Pro and TradingView.
The April nonfarm payrolls figures from the U.S. were notably underwhelming, showcasing the ongoing struggles of the labor market - a scenario that, according to the Federal Reserve, strengthens the argument for interest rate cuts.
Federal Reserve Chair, Jerome Powell, expressed readiness to preserve the current federal funds rate target range as long as necessary during a press conference on May 1. He also mentioned potential responses should the labor market show unexpected signs of decline.
The nonfarm payrolls stood in contrast with other recent macroeconomic data, therefore shaking the confidence of bulls. This resulted in an immediate surge for stocks with Dow Jones futures rising by 500 points. However, The Kobeissi Letter, a trading resource, expressed concern over how the Federal Reserve might address growing inflation considering a weak labor market and reduced GDP growth.
According to the CME Group’s FedWatch tool, the possibility of a rate cut at the June Federal Open Market Committee meeting was just under 15%, with a 33% chance of a minor 0.25% cut in July.
In response to the uptick in BTC price, analysts expressed hope for higher support levels and viewed the recent drop as a temporary reaction. Furthermore, it was observed that Bitcoin was almost out of the precarious zone linked with each block subsidy halving event.
Despite initial difficulties in regaining the $60,000 mark, Bitcoin was expected to reclaim this level soon, as per trader Josh Rager. Meanwhile, Ki Young Ju, founder of on-chain analytics firm CryptoQuant, highlighted significant "buy the dip" activity by Bitcoin whales below the $60,000 mark.
Please note that trading or investing involves a degree of risk, and all investment decisions should be made based on individual research.
Published At
5/3/2024 6:03:12 PM
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