Bitcoin Holds at $35,000 as Weaker Jobs Data Raises Speculation of Fed Rate Hike Pause
Bitcoin has remained steady around the $35,000 level for the past day following weaker U.S. jobs data, which has fueled speculation that the Federal Reserve may put an end to rate hikes. According to a report from Bitfinex, expectations of a more dovish stance from the Fed were strengthened after the release of the employment report by the U.S. Labor Department. The report showed that only around 150,000 new job positions were created in October, compared to approximately 297,000 in September.
Fed May Be Done Raising Rates, Analysts Say
The Bitfinex Alpha report suggests that the weaker jobs data solidifies the anticipation that the Fed could halt rate hikes. The report states that tightening financial conditions, with rising bond yields in recent months, may be causing the central bank to stop raising rates. Traders are now pricing in a 95% chance that rates will remain unchanged in December. The report also highlights that Friday’s jobs data indicates a possible decline in wage-driven inflation pressures.
Developing Narrative of a More Dovish Fed
The Federal Open Market Committee’s decision last week to maintain the benchmark federal funds rate further supports the narrative of a cautious approach by officials. Bitfinex analysts suggest that economic and financial developments are being taken into consideration when deciding on monetary policy. CTF Capital also agrees with Bitfinex’s forecast for interest rates and notes that market sentiment suggests a prolonged pause in rate hikes and even a potential rate cut by mid-2024.
Impact on Bitcoin and Crypto Space
The largest cryptocurrency, Bitcoin, experienced a slight decrease of 0.4% over the past 24 hours, trading at $34,920. However, the positive performance in the crypto space and U.S. equities may be further fueled by the sentiment that the Fed is done with rate hikes.
Hot Take: Speculation Rises as Weaker Jobs Data Suggests a Possible Pause in Fed Rate Hikes
The release of weaker jobs data has heightened speculation that the Federal Reserve may halt its rate hikes. The anticipation of a more dovish stance from the Fed has been strengthened, particularly as traders are now pricing in a higher chance of rates remaining unchanged in December. This narrative is further supported by recent decisions and statements from the Federal Open Market Committee. While Bitcoin experienced a slight decline, the overall sentiment suggests positive performance in the crypto space and U.S. equities as investors react to the possibility of a pause in rate hikes.
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