Bitcoin (BTC) experienced a slight increase of 0.25% in its value to $34,412 following the release of the U.S. jobs report for October, which showed a slowdown in job creation with only 150,000 new jobs against an expected 170,000. This development supports predictions of a deceleration in the Federal Reserve's interest rate hikes. The benchmark borrowing rate remained at 5.25%-5.50%, marking the second consecutive pause in rate hikes.
The CME FedWatch Tool is currently predicting a 95.4% chance that this rate will remain unchanged at the Federal Reserve's next meeting on December 13th. Unemployment reached its highest since January 2022 at 3.9%, as per the Labor Department’s report.
Despite a daily dip of 2.20%, Bitcoin saw an over 25% monthly rise according to CoinMarketCap data. Prior to the jobs data release, Bitcoin had dropped by 2%, valued at $34,235, after previously crossing $36,000 due to a near 15% surge from around $30,000.
The upcoming U.S. Labor Department data was expected to show a decline in job additions for October to 180,000 from September's 336,000. The unemployment rate and growth in average hourly earnings were predicted to remain steady at 3.8% and slow to 4% respectively.
Ilan Solot of Marex Solutions had warned that a positive jobs report could negatively impact risk assets such as Bitcoin. The Federal Reserve's decision to maintain the benchmark borrowing cost at 5.25% sparked speculation about an end to the tightening cycle and a potential rate cut. This cycle began last year and led to a 525 basis point rate hike, contributing to the crypto crash.
Powell's dovish comments raised the risk of an upside surprise in jobs data which could strengthen the dollar index, exerting further downward pressure on Bitcoin amidst financial and credit conditions impacting economic activity, hiring, and inflation.
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