Data from the U.S. Bureau of Labor Statistics showed that the U.S. labor market slowed significantly in April, with 175,000 new jobs added that month, far below the expected 240,000. At the same time, the unemployment rate rose to 3.9%, slightly higher than the expected 3.8%. The slowdown in hiring and wage growth exceeded economists' expectations.
The report sparked a rally across financial markets as investors viewed the data as a signal that the Federal Reserve was on track to start cutting interest rates .
Investors' expectations of rate cuts boosted U.S. stocks, with major indices closing higher for the week. As of close, the S&P, Dow Jones and Nasdaq all rose, up 1.26%, 1.18% and 1.99% respectively.
According to Bitpush data, Bitcoin rebounded from the $59,000 support level in afternoon trading and hit an intraday high of $63,245. As of writing, BTC is trading at $62,877, a 24-hour increase of about 7%.
Altcoin performed strongly, with only 10 of the top 200 tokens in the red, and only three of them falling by more than 2%.
Archblock (ABT) had the biggest gain, up 33.4% to $3.54, followed by ZetaChain (ZETA) up 20.1% and ORDI (ORDI) up 16.7%. GuildFi (GF) had the biggest loss, down 9.6%, Jito (JTO) down 3.6% and Arweave (AR) down 2.2%.
The overall cryptocurrency market cap is currently $2.31 trillion, with Bitcoin’s dominance rate at 53.2%.
Possibility of a September rate cut
Many market participants believe that a worsening economy means the Federal Reserve will cut interest rates more quickly.
Richard Flynn , managing director of Charles Schwab UK, said in a note that a weaker-than-expected U.S. jobs report could put pressure on the Federal Reserve to cut rates: "In recent months, it has been clear that the Fed is happy to move slowly in the cut portion of the rate cycle, but as we are seeing today, unexpected and unexpected weakness in the economy could lead to a shift in that approach. A sharp dive in the labor market could push the Fed from a stroll to a sprint."
"Given the current situation, we would stick with the Fed's decision to cut rates in September," James Knightley, chief international economist at ING Bank, said in a note on Friday.
A rate cut can boost risk assets like Bitcoin because it reduces borrowing costs, encouraging investors to seek higher returns in riskier assets. In addition, lower interest rates can weaken the value of fiat currencies like the dollar, prompting investors to turn to alternative stores of value like risky assets.
The CME FedWatch tool showed that the market's perceived probability of a rate cut in September rose to 72.6%, up from 61.6% yesterday and 57.3% last week, but down from 93% last month.
Neil Roarty, an analyst at Stocklytics, said: “Bitcoin is trading below the $60,000 mark for the first time since February, with multiple reasons being attributed to the drop. These include rising gold prices and outflows from the same Bitcoin ETFs that drove gold prices higher earlier this year. But the truth could be as simple as retail investors taking profits after a massive surge in value.”
He added: “All this has led to a roughly 15% drop in the price of Bitcoin in April, but to put it in perspective, the world’s most popular cryptocurrency has still more than doubled in value over the past seven months. Where it goes now may depend on broader economic factors, particularly a rate cut in the United States, which, if expected to come later this year, would make ‘risk’ assets like Bitcoin look more attractive.”
Bitcoin price key resistance level remains at $64,000
Bitcoin fell below $60,000 ahead of the April 20 halving event, before rebounding slightly before falling back, pinpointing up and down within a range.
Independent trader Eliz said that even if BTC recovers from levels below $60,000, the hurdles that need to be overcome remain the same. The trader explained that $62,000 is a key level on BTC’s daily chart.
Crypto KOL Lark Davis used the exponential moving average (EMA) on the daily chart to point out that Bitcoin is facing resistance at the 100-day EMA, currently priced at $59,972. The next major resistance is the 50-day EMA, currently at $63,902. Analysts believe that the bulls and bears will compete at this position.
On-chain data from market intelligence firm IntoTheBlock supports this view. Its In-Price/Out-Price (IOMAP) model shows that the 50-day EMA is located in the price range of $62,858 and $64,670, where about 1.56 million addresses previously purchased about 577,220 BTC.
The same IOMAP chart shows that Bitcoin is facing stiff resistance on its way back up compared to the support it received on the way down.
Legendary trader Peter Brandt said Friday’s rise could be a sign that a Bitcoin rally is coming as it was able to hold support at $59,000 and move higher, which fits “a very common bull continuation chart structure.”
Author: BitpushNews Mary Liu
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