Bitcoin (BTC) Although it quickly exceeded $60,000 due to the delayed release of US payroll data, it has returned. At the time of writing, stock markets are positive, DXY is weak and gold is strong. However, BTC remains weak. Again, those who opened short positions at higher levels have profited. So when will this easy profit end?
Why Bitcoin Rises and Falls
It was a meaningless decline because the rumors were right and US officials revised down employment growth as expected. The Fed has two missions that are always talked about. One is price stability and the other is to keep employment at a certain level. The Fed has to balance both of these missions. However, price stability has become a priority due to the highest inflation in 40 years. A Prize Pool Worth 21 Million TL Awaits You from BinanceTR! Participating and winning has never been easier.. You can sign up to BinanceTR from this link. Get your first crypto!
Powell and his team continued to pressure the labor market by saying that if we lower interest rates, inflation could rise again. Today’s result was a downward revision of the forecast for nonfarm payrolls announced in March. Employment was revised downward by 818 thousand (or 0.5%) in March 2024.
Despite this move, which means that the Fed is forced to cut interest rates, the BTC price is falling, which is hard to fully explain. The market expectation of a rate cut is a 100bp cut this year. A 50bp cut is priced in at the November meeting. There is also a 25bp cut expectation.
QCP Analysts Market Commentary
Analysts also talked about the rumor of a downward revision in payroll estimates and published their market assessment before the data came in. You can take a look at the chart and the estimates below to see the success of the assessment.
“Wall Street is abuzz with talk that payroll growth will be revised down by at least 600,000 jobs, suggesting that the U.S. labor market has not been as strong as the market had expected last year.
The question now is whether the Fed is behind the curve. The Fed has delayed rate cuts because of a stronger-than-expected job market and a solid economy.
We expect Powell to address this issue during his annual Jackson Hole event, but we believe Powell will not make a decision as the Fed’s September meeting is still a month away.
Banks, interest rate reduction cycle has already started to reduce Fixed Deposit rates depending on expectations. 12-month USD Fixed Deposits pay 3.5% – 4.0% interest annually. For the same term crypto- “You can lock in 9.5% per annum on cash and carry. That looks particularly attractive, especially if the Fed decides to enter a much more aggressive cycle of cuts.”
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
