Ethereum
Bitcoin and Ethereum down; Is now the time to buy? By Investing.com
Investing.com – and have come under heavy pressure since Friday’s release of U.S. jobs data, which beat expectations and dampened hopes of a Federal Reserve rate cut in September.
At the same time, this drop in prices following the US jobs report provides a good buying opportunity, according to Singapore-based trading firm QCP Capital.
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Nonfarm payrolls data released Friday showed the U.S. economy added 272,000 jobs in May, significantly higher than the 182,000 jobs estimated, and well ahead of the downwardly revised figure of 165,000 jobs. in April. While the unemployment rate rose to 4%, the average hourly wage rose 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 risk assets, including cryptocurrencies.
JP Morgan and Citi reversed their forecasts for a Federal Reserve rate cut in July, with some analysts putting rate hikes or further liquidity tightening back on the agenda. Bitcoin, which seemed poised to break through the $72,000 mark, fell nearly 3% to $68,400. Ethereum followed Bitcoin’s lead.
Increased Market Liquidity and Crypto Rebound
QCP Capital said the Federal Reserve would struggle to maintain high interest rates while other central banks reduce borrowing costs.
The report states: “The non-farm payrolls report surprised us, as it was confusing enough to boost risk aversion ahead of this week’s US inflation numbers and Federal Reserve meeting.”
“We agree that this is a good buying opportunity as markets increasingly price in at least one Federal Reserve rate cut. It will be difficult for the U.S. to ignore this while the rest of the world continues to cut 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 battle by cutting interest rates, leading to increased market liquidity, which inadvertently boosts demand for alternative investments like cryptocurrencies. currencies.