When employment data dips, the crypto spring will bloom! Don't be fooled by short-term fluctuations; the signal for the Federal Reserve to ease is about to shine bright!
Plain language interpretation of the text:
Brothers, the freshly released U.S. employment 'report card' has three key data points, and let’s break them down one by one to see whether it's a blessing or a curse for our crypto circle:
Unemployment rate: 4.3%. Slightly higher than last month's 4.2%, but exactly the same as experts predicted at 4.3%.
This means: jobs are not so easy to find, the economy is cooling down, but it hasn't reached the point of collapse, and it's in line with expectations.
How many new hires in non-farm employment: 110,000. This is significantly less than last month's 139,000, but it hits right on the expert forecast of 110,000. The same phrase: hiring is slowing down, the economy is hitting the brakes, but it’s not unexpected.
New applications for unemployment benefits: 240,000. Slightly more than last week's 236,000, just matching the expert prediction of 240,000. This indicates that the flow of unemployed people is still slowly increasing.
Core conclusion in one sentence: The U.S. economy is indeed cooling down! This could mean a slight shake for our crypto circle in the short term, but great news in the medium term!
Why is this a good thing? The logic chain is very simple:
Economic cooling -> The Federal Reserve is under great pressure! Employers are hiring slowly, and unemployment is increasing, which clearly shows insufficient economic momentum. What those old men at the Federal Reserve fear the most is this; they constantly shout about controlling inflation (prices rising too fast), but they are even more afraid of the economy simply flatlining (recession). Now this data serves as a big megaphone for them: 'Hurry! Cut rates! Ease to save the economy!'
Surge in interest rate cut expectations -> Will the dollar become 'cheap'? Once the Federal Reserve starts cutting interest rates, it means lower savings interest and lower borrowing costs. The dollar will become more abundant and cheaper in the market (liquidity increases). When the dollar is cheap, everyone is more willing to use it to invest in high-risk, high-return things, like... you know, Bitcoin, Ethereum, these 'digital gold' and 'tech stock alternatives'!
Historical cases slap the bears in the face: Think about March last year (2023), when Silicon Valley Bank had its blow-up, and the market was in a panic. What happened? The Federal Reserve quickly shifted to expectations of easing, and Bitcoin surged from below $20,000 all the way to over $30,000! This time, although it's not as scary as a bank blow-up, the logic is the same: economy weak -> expectations of easing -> money flows into risk assets -> coin prices benefit.
The Great Sage's personal view on short-term impact prediction:
Don't be fooled by 'meeting expectations'! Although the data didn’t 'disappoint', the trend is very clear: the job market is weakening. It’s like boiling a frog in warm water; after a while, the frog (Federal Reserve) will definitely jump (cut interest rates). The market is now betting that the probability of a rate cut in September is extremely high (>90%), and this data just added more weight to that bet.
Short term may 'shake a bit': Some 'smart money' might play the old trick of 'buy the expectation, sell the fact'. When the data just comes out, and the good news lands, they might take profits first or wait for the more crucial CPI (inflation data) next week before taking action. So in the next couple of days, a 3%-5% fluctuation in BTC and ETH is completely normal; those using high leverage should be careful not to get washed out!
Altcoins need to keep up with the 'big brother' and the Nasdaq: If interest rate cut expectations stabilize, U.S. tech stocks (Nasdaq) will definitely rally. When they rally, market risk appetite increases, and those small-cap altcoins (especially those related to hot sectors like AI, DePIN, and Memes) will dare to jump alongside their big brothers (BTC/ETH). So, keep an eye on whether BTC and ETH can hold key levels (like BTC at $60,000, ETH at $3,200), and also watch the Nasdaq's performance after the U.S. stock market opens tonight.
The biggest shock is next week! Brothers remember, on July 11th, the U.S. CPI (inflation data) for June will be announced! This is the real bombshell! If inflation drops, then a rate cut in September is basically guaranteed, and the crypto party continues. What if inflation rebounds? Then market expectations will be in chaos, and volatility will increase!
So, folks, the 'cold dish' of employment data is already on the table, just waiting for next week's CPI 'main course' to see whether it's sweet or salty! Do you think the Federal Reserve's rate cut in September is a done deal, and are you ready to bottom fish? Or are you worried about a resurgence of inflation and want to run for cover? Share your thoughts in the comments, and I will pick three insightful comments to give exclusive 'anti-volatility strategies'!
Remember! The market is not wrong; we are! I am the Great Sage, a top-tier layout team, serving only the ambitious and visionary madmen!
