Cryptocurrency Market Struggles as Strong Jobs Data Fuels Rate Hike Concerns

The cryptocurrency market struggled today as unexpected strength in U.S. employment data raised fears of prolonged high interest rates.

Investors worried that the Federal Reserve might delay cutting rates, leading to a sell-off in digital assets.

Bitcoin has been under pressure, with its value falling by over 10% since the Federal Reserve signaled a hawkish stance during its December 18 meeting.

In December, the U.S. economy outperformed expectations, adding 256,000 jobs compared to the 153,000 forecast by economists. The unemployment rate also declined to 4.1% from 4.2% the previous month, showcasing the resilience of the labor market.

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Portfolio manager Bryce Doty from Sit Fixed Income Advisors believes the robust jobs data could push yields higher, making it unlikely for the Fed to consider a rate cut before the next quarter.

Crypto markets had already been struggling earlier this week, weighed down by strong PMI and employment figures, noted Bitbank analyst Yuya Hasegawa. He suggested that the extent of Bitcoin’s losses would depend on how much the jobs report exceeded expectations. If the numbers were substantially higher than anticipated, Bitcoin could face additional selling pressure, with the possibility of dropping below $92,000.

Alexander Stefanov