Bitcoin drops 3.17% after strong jobs data

The leading cryptocurrency falls to $84,223 as the US labor market shows resilience. What's Next for Bitcoin and Interest Rates?

The price of Bitcoin fell 3.17% on Thursday, trading at $84,223, after US jobs data showed a resilient labor market. This could limit the Federal Reserve's (FED) ability to accelerate interest rate cuts, according to remarks by Jerome Powell. Meanwhile, positive flows into ETFs suggest that investors are still banking on the leading cryptocurrency.

*Bitcoin fell back below the 200-day exponential moving average (EMA200), located at $85,500, reinforcing short-term bearish sentiment. / Tradingview

Bitcoin Pulls Back on Strong Jobs Data

The price of Bitcoin fell 3.02% on Thursday, trading at $84,223, after Initial Jobless Claims data showed a stable labor market in the US. Unemployment claims came in at 223,000, slightly below the forecast of 224,000, but above the previous figure of 221,000. This indicator suggests that the labor market remains stable. The Fed's inflation outlook remains strong, which could delay interest rate cuts by the Fed.

Jerome Powell and Rate Expectations

In his remarks on Wednesday, Fed Chairman Jerome Powell emphasized that there is no rush to cut interest rates as long as the labor market remains strong. Powell noted that a tight monetary policy is necessary to prevent inflationary flare-ups. According to the federal funds futures market, there is an 85.1% chance that the interest rate will remain at 4.50% at the next meeting on May 7. However, expectations of a rate cut to 4.25% by June 18 rose to 60.8%.

Bitcoin and the ETF Market

Due to the drop, Bitcoin partially erased the gains recorded on Wednesday. However, the cryptocurrency remains above the fixed support of $76,600. Over the past three days, the price has received a boost from positive net flows into Bitcoin ETFs, which saw inflows of over $500 million. This capital inflow indicates that institutional investors continue to invest in Bitcoin, even in an uncertain environment.

Bitcoin and the 200-day EMA

Bitcoin fell back below the 200-day exponential moving average (200-day EMA), located at $85,500, reinforcing short-term bearish sentiment. However, the low trading volume, well below the 25-day average, suggests that sellers did not have enough strength to push the price lower. This could indicate that the decline is temporary and that Bitcoin could recover if fundamentals improve.

Crypto Market Gainers of the Day

While Bitcoin retreated, other cryptocurrencies posted notable gains over the past 24 hours. FORM led the Coinmarketcap Top 100 with an increase of 8.39%, followed by KAVA (6.79%), BNB (1.81%), XMR (1.52%), and TON (1.39%).

Bitcoin's decline this Thursday reflects the crypto market's sensitivity to economic data and monetary policy expectations. Although the strong labor market could delay rate cuts, positive flows in ETFs and open interest in futures suggest that investors remain confident in Bitcoin's potential. The Fed's next moves and economic data will be key in determining the market's direction in the coming weeks.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Please do your research and consult a professional before making financial decisions.