Why Crypto markets down today?

#BTC☀ #CryptoNewss #BTCFOMCWatch $BTC

Crypto market experienced a downturn on June 7, marking its 2nd consecutive day of declines. This trend followed the release of stronger-than-expected U.S. employment data, which revealed that the labor market is handling tight fiscal policies better than anticipated.

U.S. Labor Department reported a significant increase in job additions for May, totaling 272,000 jobs. This figure far surpassed the forecasted 185,000 jobs and April's 165,000. Despite this job growth, the unemployment rate rose to 4.0% in May, up from 3.9% in April and marking the highest rate since January 2022.

The robust employment figures suggest that the Federal Reserve is less likely to lower interest rates soon. Lower interest rates are crucial for increasing liquidity in risk assets, including cryptocurrencies. The Federal Open Market Committee (FOMC) is scheduled to meet on June 12 to discuss interest rates. Current market sentiment indicates a low probability of a rate cut in the next two meetings.

According to CME FedWatch tool, traders estimate the likelihood of a rate cut on June 12 at just 0.6%, and 8.88% for July 31. In contrast, the odds increase to 46% for September and 47.4% for November. This outlook is negatively impacting risk-on assets such as cryptocurrencies, emerging market stocks, bonds, and commodities.

Bloomberg Chief Economist Anna Wong emphasized the significance of the rising unemployment rate as a more accurate indicator of the employment situation. She noted that the Bureau of Labor Statistics' model, which added 231,000 jobs to the May nonfarm payrolls, might not fully reflect the current economic conditions. Wong suggested that the actual pace of job gains is likely below 100,000 per month, considering the increase in business closures and declining business formation.

In summary, stronger-than-expected job growth and a rising unemployment rate have dampened prospects for near-term interest rate cuts, leading to a decline in the crypto market and other risk-on assets.