Bitcoin price dropped more than 3% on Friday afternoon (7), and is now below $ 19,500 in the international market. In Brazil, the cryptocurrency is quoted at R$101,026, according to data from CoinGecko. This drop came after the Bureau of Labor Statistics, the body that measures labor market statistics in the United States, released the country’s official unemployment rate. Data shows US unemployment fell to 3.5% in September, below the 3.7% expected by the market. The lower-than-expected unemployment rate means that the US economy remains buoyant. Therefore, more pressure for inflation rates, which remain high in the world’s largest economy. With the expectation of more inflation, the probability of a 75 basis point increase – that is, 0.75% – in the US interest rate grows. The decision will come at the Fed’s next meeting in November, and the new increase should put more downward pressure on risky assets.
Bitcoin Price Drops After US Labor Data
The USA. nonfarm payroll data for september came out better than expected. The unemployment rate fell to 3.5%, below market expectations of 3.7%, the same data as in July. In addition, the unemployment rate in August was 3.7%. As a result, the number of unemployed fell by 261 thousand, reaching 5.75 million in September. Therefore, the number of employed people increased by 204 thousand, closing last month at 158.9 million. This data made most of the market turn the trend this Friday. Both BTC and the cryptocurrency market, as well as the stock exchanges, have fallen due to the Fed’s aggressive stance. Bitcoin price dropped from $20,020 to $19,592 within minutes, and then dropped below $19,500. So did Ether (ETH), which dropped 3.1% to $1,329. The ETH price is currently trading at $1,337. Among the Top 30 cryptocurrencies, only Monero (XMR) operates with a slight increase of 0.4%. The dollar index (DXY), in turn, appreciated, reaching 112.83 points and consolidating the strength of the dollar against the main global currencies.
High interest rate probability
The increase in hiring in September will make the Fed take a tougher stance, with a new rate hike. Several experts have raised concerns about the Fed’s aggressive stance, which could trigger a US recession. In fact, entities such as the United Nations (UN) have already asked the Fed and other central banks to stop raising interest rates. However, the Fed is committed to taming inflation within standard limits. In his most recent speeches, this was the motto preached by Jerome Powell, president of the institution. According to economist Jeremy Siegel, the biggest threat is not inflation, but a recession. The Federal Reserve is being overly aggressive with its monetary policy. According to the FedWatch tool, the probability of a 75 basis point rally in November jumped from 75.2% to 81.6%. Furthermore, the probability of a 50 basis point rally in December is 63.3%.
