Bitcoin dips after the jobs news, but crypto prices show relative stability

Bitcoin dips after the jobs news, but crypto prices show relative stability

Following the release of the highly awaited employment data, which revealed that the labor market is still tight and may keep the Federal Reserve on track to hike rates quickly, the cryptocurrency market plummeted alongside stocks.

Coin Metrics reports that the price of one bitcoin dropped by 3.3% to $19,380.74. To $1,322.40, ether dropped 2.7%.

In a report released on Friday by the Labor Department, the U.S. economy added 263,000 jobs in September, less than the 275,000 jobs predicted by the Dow Jones, and the unemployment rate decreased from 3.7% to 3.5%.

The jobs report suggests that the Fed won't reverse course anytime soon, so we continue to anticipate firm interest rates, which puts pressure on the cryptocurrency markets, according to Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

Although it has deteriorated recently, the link between cryptocurrencies and stocks is still strong.

He continued, "Crypto appears to be at a crucial technical crossroads here where it looks like it's trying to carve out a bottom, but feels heavy." Given the rising interest rates and the risk-off mood, I still believe it will break to the downside, but so far it's been a surprising effort to hold the line.

With the Federal Reserve laser-focused on reducing inflation, the market has been in a holding pattern where good news is bad news. While investors are expecting for a halt or a pivot, the Fed may be more likely to continue with its aggressive rate-hiking agenda in light of the new data, which puts pressure on equities and drags down cryptocurrency.

According to Callie Cox, a U.S. investment analyst at eToro, "Crypto has been the hardest hurt by rate hike fears this year." "It makes sense because many cryptocurrency projects lack cashflows, so investors participate in them more for what they might become than for the value they already offer. Future dollar value decreases as interest rates climb."

Cox also emphasized the durability of cryptocurrencies in the second half of the year, adding that although stocks have returned to new lows in response to the rise in bond yields, bitcoin and ether haven't. Since reaching its yearly lows in June, Bitcoin has been trading in a narrow range between $18,000 and $25,000.

In this weak market, Cox remarked, "To me, that's progress." "Cryptocurrency values may be indicating that rate concern is about to change. Indicators of market frothiness include the strength of cryptocurrencies. All the weak hands appear to have been eliminated by the severe growth selloff."

Bitcoin is also well off its highs, she continued. But establishing stability is a positive step.