Bitcoin
Bitcoin and Ethereum falling; Is now the time to buy? By Investing.com
Investing.com – and have been under severe pressure since Friday’s U.S. jobs data, which beat expectations and dampened hopes of a Federal Reserve rate cut in September.
Meanwhile, this price drop following the US jobs report offers a good buying opportunity, according to Singapore-based trading firm QCP Capital.
Invest with Investing Pro and be part of success in the world of cryptocurrencies. Take advantage of significant growth opportunities in the cryptocurrency world through promising crypto stocks, with an additional discount when signing using the code SAPRO2. Click here to subscribe.
Nonfarm payrolls data released Friday showed the U.S. economy added 272,000 jobs in May, significantly above the 182,000 jobs estimated, and far more than the downwardly revised reading of 165,000 jobs in April. Although the unemployment rate rose to 4%, average hourly earnings increased by 0.4% month-on-month, above expectations of 0.3%.
Markets immediately reduced the likelihood of a 25 basis point Federal Reserve rate cut in September from 85% to 60%, leading to a decline in risky assets, including cryptocurrencies.
JP Morgan and Citi canceled their forecasts for a Federal Reserve rate cut in July, with some analysts putting rate hikes or tighter liquidity restrictions on the agenda. Bitcoin, which looked set to break the $72,000 barrier, fell nearly 3% to $68,400. Ethereum followed Bitcoin’s example.
Increasing Market Liquidity and Crypto Recovery
QCP Capital said the Federal Reserve will have difficulty keeping interest rates high while other central banks are reducing borrowing costs.
The report stated: “The nonfarm payrolls report surprised us as it was confusing enough to stimulate risk aversion ahead of US inflation numbers and this week’s Federal Reserve meeting.”
“We agree that this is a good buying opportunity as markets will increasingly bet on at least one rate cut from the Federal Reserve. It will be difficult for the US to ignore this as the rest of the world continues to cut rates interest rates.”
The European Central Bank and the Bank of Canada cut interest rates last week, as the Group of Seven (G7) began a cycle of monetary easing.
Other central banks, including the Federal Reserve, may soon join the fray by cutting interest rates, leading to increased market liquidity, which inadvertently increases demand for alternative investments such as cryptocurrencies.