Financial markets are in for a rough ride this weekend after the U.S. non-farm payrolls report for August came in much lower than expected.
Uncertainty Surrounding Fed's Interest Rates
The report showed that 142,000 jobs were added in August, falling short of the 165,000 forecasted by analysts. This slight miss, combined with unemployment holding steady at 4.2%, has left investors uncertain about the Federal Reserve’s next move on interest rates.
Crypto Market Reaction
The crypto industry has not been spared. Bitcoin (BTC) isn’t having its best week. The cryptocurrency has dipped to $54,410 at press time after briefly dropping to a low of $52,500 just a day before. The wider sell-off in U.S. equities, driven by Nvidia’s continued slump, has weighed heavily on crypto prices. Ethereum (ETH) followed the same way, crashing to $2,150. The crypto ETF market is also under strain. Bitcoin spot ETFs have now seen an eight-day streak of outflows, signaling growing concerns among institutional investors. But despite the price drops, the options market remains somewhat calm. Large put options were sold during the session, so some traders might still be looking for a bounce or a consolidation phase.
Reaction of Traditional Markets
The Nasdaq dropped 2.2% on September 6, while the S&P 500 lost 1.5%, making it one of the worst-performing weeks of the year for U.S. stocks. The Dow Jones Industrial Average also took a hit, shedding over 600 points, or about 2.1%, as traders struggled to make sense of the labor data and its implications for future interest rate cuts. Crypto enthusiasts, however, remain divided. Some long-term holders, or HODLers, are sticking with their positions, believing that Bitcoin will bounce back in the final quarter. Historically, October to December has been a stronger period for crypto, so many are waiting to see if history repeats itself.
Currently, both crypto and traditional markets are under intense pressure. The next few months will reveal whether Bitcoin can hold its $54,000 support level or continue its downward trend.
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