Bitcoin has experienced a notable increase in price following the release of data indicating a decline in private sector jobs in the US in June.
Decline in US Private Sector Jobs
According to Automatic Data Processing (ADP), private sector jobs decreased by 33,000 in June, marking the largest drop since March 2023. Experts had anticipated an increase of nearly 100,000 jobs. "Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month," commented ADP chief economist Nela Richardson.
Bitcoin Responds to Employment Data
Bitcoin rose 2% following the employment data release, reaching $108,000. Ahead of the US nonfarm payroll report set for release on July 3, crypto market participants pointed out that weakness in the labor market raises the odds for the Federal Reserve to cut interest rates sooner. This is seen as a source of liquidity injections for Bitcoin and other risk assets. "Fed rate cuts are becoming increasingly likely in July..." remarked Andre Dragosch, Head of Research at Bitwise.
Forecasts for Bitcoin Prices
Traders are once again focusing on exchange order-book liquidity. The surge to $108,000 triggered a liquidation of many short positions. Analysts note that this creates potential for further upward price movement. However, $108,000 remains a local resistance level for BTC/USD, despite growing predictions of new all-time highs in July.
The US labor market situation significantly impacts Bitcoin's price, creating volatility and opening doors for substantial gains. Monitoring the Federal Reserve's interest rate dynamics will also be a key factor for cryptocurrency investors.
