'Employment Shock' and Interest Rate Fear 'Drops'...Bitcoin (BTC) Recaptures $61,000

▲ Bitcoin (BTC)/ChatGPT Generated Image

Bitcoin (BTC) has recovered the $61,000 mark in response to the slowdown in US June employment figures, rekindling short-term rebound expectations in the cryptocurrency market, which had been suppressed by interest rate hike concerns.

According to CoinGape, a cryptocurrency specialized media outlet, on July 2 (local time), US non-farm payrolls in June increased by only 57,000, significantly falling short of the market forecast of 115,000. May's employment figures were also revised downward by 43,000. The outlet reported that the employment slowdown partially revived interest rate cut expectations, stimulating Bitcoin's rebound.

The US unemployment rate was recorded at 4.2%, lower than the market forecast of 4.3%. Although the increase in employment was significantly lower than expected, the unemployment rate was also lower, indicating that the labor market showed both stability and volatility. The outlet pointed out that if the employment slowdown solidifies into a trend, expectations for interest rate cuts could strengthen further.

Bitcoin climbed above the psychological resistance level of $61,000 after the release of this employment report. Previously, Bitcoin had fallen below the $60,000 mark this week amid concerns about the Federal Reserve's (Fed) potential interest rate hikes. However, when the poor employment data was released, it rebounded by more than 2% from its intraday low, raising hopes for a recovery in risk assets.

The possibility of an interest rate hike has also decreased in the market. According to Polymarket data, the probability of an interest rate hike this year dropped from 54% the previous day to 50%. Furthermore, ahead of the July Federal Open Market Committee (FOMC), CME FedWatch reflected an 82.4% probability of a rate freeze, a significant increase from approximately 72% the previous day.

Remarks by Federal Reserve Chairman Kevin Warsh also influenced market interpretation. Warsh avoided direct comments on the monetary policy path at the European Central Bank (ECB) forum the previous day but stated that inflation risks were easing. The outlet explained that the combination of employment slowdown and signs of easing inflation burden helped Bitcoin escape the shock of falling below $60,000.

However, a weakened employment indicator does not confirm a trend reversal for Bitcoin. The market is leaning more towards the Fed freezing interest rates at the July FOMC, but the flow of risk assets could fluctuate again depending on whether the employment slowdown is a short-term shock or a sign of economic cooling. Ultimately, Bitcoin's current rebound is seen as a relief rally stemming from the receding fear of interest rate hikes.

[Article Key Summary]

-US non-farm payrolls in June increased by only 57,000, significantly falling short of the estimated 115,000.

-Bitcoin recovered the $61,000 level after the employment data release, rebounding by more than 2% from its intraday low.

-In the market, the probability of an interest rate hike this year decreased from 54% to 50%, and the probability of a rate freeze at the July FOMC increased to 82.4%.

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