The U.S. jobs market continues to exhibit strength with the government reporting the addition of 303,000 jobs last month. That's the strongest headline number since May 2023 and easily topped economist forecasts for 200,000 and February's 270,000 additions (revised from a previously reported 275,000).

The unemployment rate in March dipped to 3.8% against expectations for 3.9% and February's 3.9%.

The price of bitcoin {{BTC}} fell about 0.5% in the minutes following Friday morning's report to $66,000. In traditional markets, U.S. stock index futures gave up a chunk of earlier gains, but are still modestly higher. The 10-year U.S. Treasury yield rose 6.5 basis points to 4.38% and the dollar index added 0.5%.

Coming into 2024, markets had priced in as many as five or six U.S. Federal Reserve rate cuts to begin as soon as March. The economic data, however, hasn't cooperated. Inflation has actually risen somewhat in the first quarter of the year and job growth has remained robust.

March has obviously come and gone with no rate cut and traders ahead of today's numbers had moved expectations of the first rate cut to June or July, according to the CME FedWatch Tool. A total of just three rate cuts are expected for the full year and even that could be too much.

Speaking yesterday, Minneapolis Fed President Neel Kashkari suggested the possibility of no rate cuts at all in 2024. His remarks prompted a sharp reversal in stocks, with the major averages closing down more than 1%. Just following today's numbers, swaps trading indicated expectations for the first rate cut had moved out to September.

Checking other report details, the labor force participation rate rose to 62.7% from 62.5%, suggesting sizable numbers of people returning to the workforce. Average hourly earnings rose 0.3% in March, in line with expectations and up from 0.2% in February. On a year-over-year basis, average hourly earnings rose an in line 4.1%, down from 4.3% in February.

Bitcoin hovers near $66,000, with the CoinDesk20 Index signaling broader market weakness.

Crypto futures rates and open interest have decreased, signaling a potential end to a two-month rally.

Bitcoin {{BTC}} held on to losses during the Asian trading hours on Tuesday, trading at around $66,000, as traders digested resurgent Treasury yields and the possibility that the Fed might delay rate cuts until later this year.

At the time of writing, ether {{ETH}} changed hands above $3,300, while the CoinDesk 20 (CD20) was down 0.6% to 2,532.

The yield on the 10-year Treasury note clocked a two-week high of 4.40% overnight due to persistent inflation and unexpectedly strong manufacturing activity. An uptick in the so-called risk-free rate typically spurs an outflow of money from risk assets and zero-yielding investments like gold. The yellow metal, however, remained resilient amid the weak tone in bitcoin and Wall Street’s tech-heavy index, Nasdaq.

“Bitcoin retraced down to $65,000, mostly attributed to the recent macro outlook on interest rates and rising Treasury yields,” Semir Gabeljic, director of capital formation at Pythagoras Investments, said in an email interview. “Higher interest rate environments typically tend to reduce investor appetite to risk.”

On Polymarket, bettors have ruled out a rate cut by May and are split 50-50 on whether one will happen in June. Most of the certain money is on it happening in the fall.

The CME Fed Watch tool has a 97% chance of rates staying the same after May’s meeting.

Coinglass data shows that over $245 million in long positions have been liquidated in the last 24 hours, with $60 million in BTC positions getting rekt.

“Perpetual futures funding rates for most crypto assets are back to 1bps, and global futures open interest decreased by 10 percent overnight, indicating some leveraged long positions are closed,” Jun-Young Heo, a Derivatives Trader at Singapore-baed Presto, added.

“As recent bitcoin ETF inflows are stagnating and BTC and ETH market prices came below the 20-day moving average, some trend followers would have regarded yesterday’s downturn as the end of a two-month-long rally,” he continued.