Why Is The Crypto Market Down Today: Jobs Report & FOMC Meeting

The cryptocurrency market experienced a sharp decline on Friday, leading to significant price drops across various digital assets. This downturn has raised questions about the factors influencing these sudden market shifts.

Bitcoin's Sudden Price Crash 

On Thursday, Bitcoin saw a minor pullback of 0.48%. However, by Friday, the market experienced a more severe crash, with Bitcoin's price plummeting by more than 2.5%. This downturn triggered a broader market pullback, affecting top altcoins and the entire crypto sector. 

Altcoins and Meme Coins Downtrend

Top altcoins, including Ethereum and Solana, faced significant declines, with prices dropping by more than 3% and 5.5%, respectively. Meme coins, which had been performing well recently, also suffered notable losses. PEPE, Floki, and WIF saw drops of about 9.5%, 9%, and 16%, respectively.

Market Liquidations and ETF Inflows 

The overnight bearish trend led to $360 million in long liquidations. Despite this, U.S. Bitcoin ETFs continued to show a positive outlook, with a daily net inflow of $130.99 million. However, this inflow reflects a declining trend compared to earlier in the week.

Impact of U.S. Job Reports 

The U.S. Labor Department's May jobs report significantly impacted the crypto market. The report revealed an addition of 272,000 jobs, far exceeding the expected 185,000. Despite this growth, the unemployment rate rose to 4%, reaching January 2022 levels. This data influenced market expectations regarding potential interest rate cuts by the Federal Reserve.

Employment Data and Market Reactions 

The rise in the unemployment rate led to profit bookings in the crypto market. Investors reacted to the reduced likelihood of imminent interest rate cuts, which would otherwise boost market demand and liquidity. The anticipation of rate cuts was a major factor driving market optimism.

Bitcoin (BTC) Price Prediction

Following the price drop, Bitcoin is trading around $69,400, showing minimal movement in early Asian trading hours. Technical analysis indicates a Doji candle formation at the 23.60% Fibonacci level, suggesting a potential support level. Despite the bearish engulfing candle pattern from the previous night, dynamic support from the 50D EMA and a stable daily RSI indicate potential recovery.

FOMC Meeting Ahead

The recent market pullback is likely a reaction to the employment data, creating uncertainty about future price movements. However, there is potential for recovery, with Bitcoin possibly reaching $71,000 before the Federal Open Market Committee (FOMC) meeting on June 12. Given the current economic data, a significant price movement on the day of the meeting is anticipated.