On June 7, Bitcoin, Ethereum, and other altcoins faced a significant downturn following stronger-than-expected U.S. employment data. Despite the sharp sell-off, many traders see this as a temporary “shakeout” rather than a lasting decline.
Employment Data Triggers Crypto Dip
Unexpected Job Growth
The U.S. Employment Situation Summary Report revealed a surprising increase in jobs, challenging the predictions of crypto analysts who had anticipated a weaker report. This job growth led to market volatility, with Bitcoin falling 1.99% to $69,410 and Ethereum dropping 3.22%. Altcoins like PEPE, Solana, and DOGE experienced even steeper losses.
Trader Reactions
Pseudonymous trader il Capo of Crypto, with 848,000 followers, described the market action as a strong sell-off into support, particularly impacting altcoins. He views this as a “shakeout,” a term used when many investors sell off due to economic uncertainty.
Mixed Signals in Employment Data
Insights from Analysts
Markus Thielen, head of Research at 10x Research, noted that the employment report’s impact on the crypto market wasn’t straightforward. The mixed data—rising unemployment to 4.0% coupled with an increase in part-time jobs—did not directly trigger the market drop. He emphasized that the crypto sell-off occurred without a clear catalyst.
Potential for Rate Cuts
Thielen pointed out that a weaker employment report could have brought back the possibility of rate cuts. He highlighted the upcoming CPI inflation report as a critical factor. If year-on-year CPI falls to 3.3% or lower, it could push Bitcoin to new highs.
Market Outlook
Support Levels and Future Trends
Il Capo of Crypto believes that if key support levels hold, the market could see a bullish continuation soon. This sentiment is echoed by other traders who view the current decline as a buying opportunity.
Bull Market Prospects
Pseudonymous trader Kaleo remarked that the real bull market hasn’t even started yet, suggesting that the current dip could be a precursor to significant gains ahead.
Conclusion
Despite the recent downturn triggered by strong U.S. employment data, the crypto market shows signs of resilience. Analysts and traders remain optimistic about a bullish continuation, contingent on key support levels holding and upcoming economic data. This momentary “shakeout” might be an opportunity for investors to position themselves for potential future gains.
Austin Kaiser is a self-taught value investor with over 10 years of experience. He holds an MBA from Florida State University and certifications in Risk Management Assurance and Internal Auditing. Austin covers the Business News category for our site.