The crypto market today was on a slight upswing, a small recovery after three consecutive days of falling prices. This gentle rise of 1.5% brought the crypto market’s worth from a low ebb to $1.14 trillion. This was not an isolated incident, but rather a reflection of the market participants’ anticipation that the Federal Reserve will not raise interest rates for July following a disappointing jobs report. However, this minor relief does not necessarily signal smooth sailing ahead.
It appears that the sluggishness in the jobs market coincides with the slightly rising crypto market. The U.S. Labor Department reported that the labor market only added 209,000 jobs in June, a decrease compared to 306,000 jobs in the preceding month.
This simultaneous occurrence: the slowing down of the job market and the modest rise in cryptocurrency value may have fueled the hopes of the market players that the Federal Reserve might choose to keep the interest rates flat in its next meeting. But even this optimistic view carries ambiguity since a mixed opinion prevails among experts.
Some people, like Nick Timiraos from the Wall Street Journal, foresee the possibility of a hike in September. Others are more cautious, preferring to wait and see if the job figures will decline by Halloween before proposing an interest rate increase. As such, the future is uncertain, and the June jobs report will soon become old news.
Interestingly, as the dollar lost some of its strength, falling to a two-week low, the crypto market experienced an uptick. A potential explanation is that the interactive dynamism between the greenback and the crypto market is a negative correlation. In other words, when one dips, the other rises.
The trends are indicating a rather complex picture for the crypto market’s prospects. In spite of the soft jobs data, the market assigns a high likelihood (about 95%) to the July rate hike by the Federal Reserve. If it materializes, it raises concerns over potentially imposing a ceiling on the market’s growth.
Additionally, a technical pattern seems to be hinting at a downturn – a scenario that could see the crypto market cap dropping to around $1 trillion. Alternatively, a continuous rise could trigger an opposite pattern, leading to an optimistic projection of over $2 trillion for the year 2023.
In conclusion, the crypto market’s recent rise might be short-lived, a mere technical bounce, due to looming uncertainties about the future. As such, caution is advised, and individuals should base investment or trading decisions on their own research and risk profiles.
Source: Cointelegraph
