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(BTC) dropped below $30,000 on Friday morning, after ADP Research Institute revealed the strongest one-year growth in the U.S. job sector for the month of June, reaffirming the market's expectation of an interest rate hike in July.
The U.S. Department of Labor will release the official numbers today.
Per data from CoinGecko, Bitcoin rapidly slipped from its weekly high of $31,248 to a 24-hour low of $29,904 in the early hours of Friday morning, before recovering to its current level of around $30,140, down 1.9% on the day.
Bitcoin’s tumble dragged the rest of the crypto market down, with the total market capitalization of crypto dropping 2.9% to $1.22 trillion.
Pepecoin (PEPE) topped daily losses, dropping 9%.(ETH) lost 2.5% in the last 24 hours to trade at $1,860. Among the top 100 coins by market cap,
Another rate hike on the horizon?
The employment report is one of the most crucial factors for the U.S. Federal Reserve in determining their monetary policies besides inflation.
The Fed began its most stringent monetary policy in March 2022 by hiking the benchmark interest from near zero to around 5% by April 2023 to curb inflation.
Higher interest rates increased the cost of doing business, which restricted growth. Since last year, interest rate hikes have been the most potent catalyst in pulling down the prices of stocks and crypto.
Strong job numbers indicate a robust economy, allowing the Fed to hike interest rates further.
Currently, CME’s FedWatch tool shows that the market is placing an 89.9% chance that the Fed will hike its benchmark rate. The Fed is scheduled to meet on July 25 and 26 to decide their policy rate for August.
The stock market also incurred losses yesterday as the tech-heavy Nasdaq index lost 0.86% or 131.4 points, and the S&P 500 index ended the day at a 0.68% loss or 30.3 points lower.
Contrary to the usual trend, the dollar index (DXY), which measures its value against other major currencies, also closed in red yesterday, falling 0.23% to 103.1 points.
The release of June’s inflation numbers on July 12 will also influence the Fed’s decision. The rate of increase in annual inflation eased to 4% in May from its peak of 9.1% in June 2022.