Bitcoin (BTC) fell below $30,000 due to predictions of a Federal Reserve interest rate hike. The drop was precipitated by significant job growth in the United States in June. This bolstered the market’s expectation of an anticipated rate hike.
Due to the ADP Research Institute, the US job market experienced its largest one-year gain in history, exceeding market expectations. As a result, Bitcoin dropped from a weekly high of $31,248 to a 24-hour low of $29,904 in a matter of minutes. It quickly rebounded to roughly $30,140.
Bitcoin’s decline had an impact on the entire cryptocurrency market, with overall market value falling 2.9%. Ethereum (ETH) was also down 2.5%, trading at $1,860. Pepecoin (PEPE) saw the largest daily fall of 9% within the top 100 cryptocurrencies by market valuation.
The job report, along with inflation, is very important to the Federal Reserve in setting its monetary policy. The strong job growth in June indicates a prospering economy, which might pave the way for additional interest rate hikes.
Since March 2022, the Fed has tightened monetary policy by increasing the benchmark interest rate from near zero to around 5%. This was done in order to keep inflation under control. Such rate hikes have had a significant impact on stock and cryptocurrency prices.
NEWS:📉 Bitcoin experiencing market volatility as market braces for Fed rate hike 📈💸 #FederalReserve
— Walletor (@walletorapp) July 8, 2023
Market predictions now indicate that the Fed will conduct another rate hike. The Federal Reserve will meet on July 25 and 26 to set the policy rate for August. The stock market also suffered losses, with the tech-heavy Nasdaq index falling by 0.86% and the S&P 500 index falling by 0.68%.
Furthermore, the dollar index (DXY), which measures the value of the dollar relative to other major currencies, finished in the red, falling 0.23% to 103.1 points.
The announcement of June’s inflation figures on July 12 will have an additional impact on the Federal Reserve’s choices. The annual inflation rate slowed in May, falling from a high of 9.1% in June 2022 to 4%. Traders are going to closely track economic data for possible shifts in the digital currency and stock markets as investors expect the Fed’s rate decision.