Bitcoin Wobbles After Confusing US Jobs Data
The price of Bitcoin (BTC) experienced sudden volatility on the morning of June 7th, coinciding with the release of surprising US jobs data.
Data from Cointelegraph Markets Pro and TradingView revealed a sharp drop in Bitcoin’s price by $1,300 within a single hour, followed by a partial recovery. This volatility mirrored the market’s knee-jerk reaction to the US nonfarm payrolls data.
The data significantly exceeded expectations, suggesting the labor market was handling tight fiscal policy better than anticipated. This, in turn, reduced the likelihood of the Federal Reserve lowering interest rates in the near future. Lower interest rates are typically seen as positive for riskier assets like Bitcoin, as they increase liquidity in the market.
Economist Mohamed El-Erian, quoted by Bloomberg, stated that the data “does close the door on July rate cut.” The Federal Open Market Committee (FOMC) was scheduled to meet on June 12th to discuss interest rates. Based on the new data, markets now predict a slim chance of a rate cut at the next three FOMC meetings. At the time of writing, data from CME Group’s FedWatch Tool indicated a 0.6%, 8.8%, and 50.8% probability of a minimum 0.25% decrease for the June, July, and September FOMC meetings, respectively.
Mixed Signals in Jobs Report
Some analysts highlighted the seemingly contradictory data points within the jobs report. While the official survey reported strong job growth of 272,000 positions in May, the unemployment rate unexpectedly rose to 4%, exceeding the predicted level by 0.1%.
Commentator Holger Zschaepitz noted this inconsistency in a post on X, stating, “The US labor market looks completely schizophrenic. While the Establishment survey by BLS reports 272k new jobs for May, the Household survey shows a large drop in the number of employed, down 408k jobs. This is why the US unemployment rate has risen from 3.9 to 4% despite a lower labor participation rate.”
Bitcoin Price Remains in Holding Pattern
Following the initial volatility, Bitcoin’s price action entered a period of consolidation. Market participants adopted a wait-and-see approach as volatility subsided.
Popular trader Daan Crypto Trades observed that BTC/USD remained below key resistance levels, similar to the price positioning before the data release. Another trader, Skew, emphasized the need for increased buying pressure in the spot market to fuel an upward trend.
“Tight area here generally with previous highs & resistance ($71.6K),” Skew noted in an X post.
Data from CoinGlass, a market analysis resource, showed increased buying and selling orders both above and below the current spot price. Resistance was now concentrated around $72,600, compared to $71,900 earlier in the day.
Daan Crypto Trades summarized the situation, stating, “Still consolidating between the two major support & resistance levels at $67K & $72K. The longer price consolidates below this resistance, the more likely it is to break in my opinion. We’ll just patiently wait :)”
An accompanying chart displayed the recent price movements of BTC/USD, highlighting the overall sideways trading pattern characterized by higher highs, lower highs, lower lows, and higher lows.
