The price of Bitcoin has solidified above the psychological threshold of $60,000. The catalyst for this rise was a U.S. employment report, which shifted expectations for a Federal Reserve rate cut from November to September, according to Bloomberg.
According to the Labour Department report, April saw the addition of 175,000 new jobs in the non-farm sector, compared to 303,000 in March and a forecast of 238,000.
The unemployment rate increased from 3.8% to 3.9%, contrary to expectations of it remaining unchanged.
Annual wage growth slowed from 4.1% to a June 2021 low of 3.9%. Analysts had predicted a slowdown to 4%.
The macroeconomic data prompted a reassessment of the Federal Reserve’s key rate trajectory for 2024—markets now anticipate two 0.25% cuts, with the first expected in September instead of November before the statistics were released.
The agency noted that the upcoming consumer price dynamics report on May 15 will now be crucial for investors.
“Overall, the labour market remains strong, and they will need to see more evidence of a slowdown or an unexpected sharp drop in employment […]. Ultimately, the committee will hold the rate until there is clarity on inflation,” commented Ali Jaffery of CIBC Capital Markets.
Bloomberg editor Chris Anstey explained that wages constitute a large portion of costs in the services sector. The slowdown in wage growth should theoretically help ease price pressures in this sector and alleviate Federal Reserve concerns, the expert noted.
Following the U.S. labour market report, global markets saw an increased appetite for risk. The S&P 500 index opened 1.2% higher. The yield on two-year bonds, sensitive to Federal Reserve policy, fell by 9 basis points to 4.88%.
The cryptocurrency market’s reaction was more pronounced—the daily growth rates of the top 10 assets by market capitalization, excluding stablecoins, ranged from 1.7% (XRP) to 13.7% (TON), according to CoinGecko.
Bitcoin gained 3.5% within an hour of the statistics release and continues to rise, approaching $62,000. Ethereum’s growth was more modest at 2.2% ($3050).
According to CryptoQuant founder and CEO Ki Young Ju, Bitcoin whales accumulated 47,000 BTC in the past 24 hours.
#Bitcoin whales accumulated 47K $BTC in the past 24 hours. We’re entering a new era. pic.twitter.com/SXgzToN8GU
— Ki Young Ju (@ki_young_ju) May 3, 2024
“We’re entering a new era,” he commented.
Former BitMEX CEO Arthur Hayes had predicted that the price of the leading cryptocurrency would surpass $60,000 and move towards $70,000 over the summer.
Earlier, Bitfinex’s head of derivatives, Jag Kooner, identified signs of the market transitioning to a summer lull.