Bitcoin (BTC) saw a surprise retest of $27,000 around the time of the Wall Street open on October 6, as US employment data shook the markets.
Analysis: Jobs data ‘not what the Fed wanted to see’
Data from Cointelegraph Markets Pro and TradingView I followed Bitcoin’s price action as the largest cryptocurrency lost 2.1% in one hourly candle.
The subsequent rebound saw the bulls claw back those losses, with focus now back at $27,700 – the area of interest before the data release.
This volatility came thanks to the US non-farm payrolls report jumping to almost double the expected number for September – 336,000 versus 170,000 respectively.
In a demonstration of the labor market’s continued resilience in the face of the Fed’s anti-inflation measures in the form of interest rate hikes, the implications of the September result were seen as bad for risk assets – including cryptocurrencies.
“Good news is bad news because the Fed wants the labor market to lose steam,” said popular trader CrypNuevo. books In part in response to X.
“Given this increase, it surprises me that the unemployment rate has remained the same (3.8%). “So I think the data will be revised downward and will be much lower.”
Like others, CrypNuevo nonetheless looked to the growing possibility of another rate hike from the Federal Reserve at the November meeting of the Federal Open Market Committee (FOMC).
“The market understands this data as a new threat of a new potential hike of 25 basis points on November 1 (25% odds given yesterday versus 31.3% odds today),” he continued, referring to CME Group data. Feedwatch tool.
“We have the CPI on Thursday next week, and hopefully that will give us a clearer view.”
The Consumer Price Index, or CPI, is one of the key inflation indicators of Federal Reserve policy.
Continuing the financial commentary, Al Qubaisi’s letter noted that the pressure is now on the markets and on the Fed itself.
“Furthermore, the Fed was previously expected to pause until June 2024, and is now expected to pause until July 2024.” mentioned On market expectations of an adjustment in interest rates.
“Market futures fell more than 400 points after the report. This is not what the Fed wanted to see.”
Bitcoin’s open interest is draining
Given Bitcoin’s specific reaction, popular trader Skew showed that spot and derivatives traders are exiting the NFP print.
Related: Bitcoin Still Outperforms US Dollar Against ‘Egg Inflation’ – Fed Data
Points were sold and people vomited after the jump in non-farm payrolls
The pants chase a little more here
Possibly PvP for the rest of the morning https://t.co/7faaQLfur5
– Δ skew (@52kskew) October 6, 2023
“A slight shift on November 1 towards a rate hike is possible but still unlikely,” another prediction of the Fed’s actions. is reading.
“We will need to see the Fed’s tone and positions first to assess the possibility.”
Meanwhile, fellow trader Daan Crypto Trades updated the analysis earlier today, highlighting a decline in Bitcoin open interest (OI).
Previously, this had reached levels that had previously initiated bullish surges followed by downward swings.
“This means losing another $600 million in open interest since yesterday’s high. Getting to the average, healthy levels again,” he summed up.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.