The crypto market crashed overnight and Bitcoin took a dip along with other cryptos such as Ethereum. However, it has since rebounded in just a few hours, reaching its previous levels. At the moment, Bitcoin is hovering right around $28,500, but what’s more impressive is that it’s doing well in the midst of cold JOLTS job data.
The two largest cryptocurrencies by market volume have reacted positively to a reduction in job openings. Early on Tuesday, the Job Openings and Labor Turnover Surver—JOLTS for short—stated that job openings in the USA are on a decline. Still, Bitcoin and Ethereum have managed to respond positively, increase around 2% in the first hour after the statement. Things have gone a bit south from there, but the top cryptocurrencies have still managed to close the day in a positive manner.
Lowest Level of Job Openings in Two Years
The JOLTS report showed that job openings in the USA have declined by 9.6 million this March. Expectations were set at 9.775 million, so the numbers are far below. This is the lowest the number has been since April 2021. And, while it’s not a good thing for the economy, it is a great thing for cryptocurrencies. Historically, they’ve managed to raise prices when there was weakening jobs data. Why does that happen? There are quite a few factors involved in this.
First, when the number of expected job openings is lower than predictions, the Fed raises interest rates until inflation has been put under control. These increases are never a good thing for cryptocurrencies or asset prices in general. Labor markets should cool down for inflation to decline, but in the current economic climate, bad employment data is good for asset prices, crypto included.
Bitcoin and Ethereum responded great to this data before falling a bit. But, the recovery was quicker than expected. Crypto markets are most likely making an early move ahead of Wednesday’s US central bank interest decision, with an expected 25 basis point raise already banked in.
Surprisingly, other risk assets such as Nasdaq Composite, Dow Jones Industrial, or the S&P 500 didn’t react the same way. While correlations between risk assets and cryptocurrencies have been natural in the past few years, they have weakened this year. On-chain data shows that it’ll most likely be a few quiet days for cryptos. There shouldn’t be any major action until the Fed decides the rates.
Will There Be a Rate Mistake?
According to a survey conveyed by CoinShares in April this year, more than 64% of people believe the Fed has made a policy error. 22% of the surveyed people thought there was no mistake so far, but it’s coming soon. According to experts, the current appetite for altcoins is weaker, while Bitcoin and Ethereum continue to outperform everything.
If the economy weakens further, ETH’s price may be affected. Recession would result to the Fed pivoting and cutting down rates, which will be good for gold and Bitcoin.