Why the Market is Down! US Jobs Report Sparks Major Bitcoin Dip, Wipes Out $500 Million in Open Interest
The latest US jobs report sent shockwaves through the cryptocurrency market, erasing over $500 million in Bitcoin open interest.
The US Bureau of Labor Statistics reported mixed employment data for May. While the establishment survey showed an increase of 272,000 new hires, the household survey revealed a rise in unemployment to 4.0%, the highest since January 2022. Average weekly hours remained unchanged at 34.3, signaling a sluggish economy, and average hourly earnings increased by 0.4% in May, a 4.1% rise from the previous year.
Private sector hiring averaged just over 200,000 new jobs per month over the last three to six months, up from 155,000 at the end of last year. The index of aggregate weekly payrolls for private-sector workers rose by 5.4% over the past year, down from the previous 6%-6.5% range, aligning with 2018’s highs.
Following the report, Bitcoin’s price corrected by 2%, dropping from $72,144 to $70,668, leading to substantial liquidations. IT Tech noted, “Over $500 million of Bitcoin open interest wiped out within minutes. Shorts and longs were liquidated.”
The mixed signals from the job report caused significant market fluctuations. An increase in hiring suggests economic strength, while rising unemployment and steady weekly hours point to underlying weaknesses.
Charles Edwards, founder of Capriole Investments, commented on the market’s reaction, noting, “Unemployment just hit the highest level since COVID, and markets whipsawed down. Often, the first move on these announcements is the wrong one. Time will tell. But it for sure looks like unemployment has bottomed now, which suggests US liquidity will need to rise and rise soon. Rate cuts incoming.”
Based on the latest jobs report, Bitcoin and other digital assets are expected to remain volatile. Exercise caution. If a long-term holder, probably do nothing. Don't freak out! Stick to your strategy.
