Cryptocurrency traders believe that the recent market downturn is just a "shakeout" and there is a "bullish continuation" on the horizon.
Market Reaction to Employment Data
Bitcoin (BTC), Ethereum (ETH), and the broader altcoin market experienced a downturn following the release of the United States employment data on June 7. The data, which exceeded expectations, has been viewed by many traders as a temporary setback rather than a long-term trend.
Traders' Perspectives
Pseudonymous crypto trader il Capo of Crypto, with a following of 848,000 on X, described the situation as a "strong sell-off into support." They noted that altcoins suffered more significantly but maintained that it "looks like a shakeout"—a term used to describe a situation where a large number of investors sell off simultaneously, typically due to market or economic uncertainty.
Employment Report's Impact
The same day, the U.S. Employment Situation Summary Report showed a higher-than-expected increase in jobs. This outcome contradicted predictions by crypto analysts who believed a weaker employment report would lead to a reduction in inflation, thereby boosting Bitcoin prices.
Markus Thielen, head of Research at 10x Research, had previously suggested that a weaker employment report could lead to rate cuts, potentially pushing Bitcoin to new highs. Thielen stated on June 5, “A weaker surprise could bring back rate cuts, and next week, we will get the CPI inflation report. If CPI [year-on-year] is 3.3% or lower, it will likely push Bitcoin to new all-time highs.”
Market Dynamics
Despite the employment data showing a different trend, Thielen doesn't believe the report directly caused the crypto market drop. "Crypto sold off at the end of Friday without a determining catalyst," he stated on June 7. He further explained that the U.S. employment data was mixed, noting that while the unemployment rate climbed to 4.0%, there was an unexpected increase in the number of jobs added, primarily due to an increase in part-time workers.
In summary, while the market downturn has raised concerns, many traders view it as a temporary shakeout rather than a long-term bearish trend. The mixed signals from the employment data and upcoming CPI report will be crucial in determining the next steps for the crypto market.
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