Bitcoin (BTC) quickly retested $27,000 at the open on Wall Street on October 6 as U.S. jobs data rattled the market. U.S. nonfarm payrolls (NFP) jumped to nearly twice the September forecast, at 336,000 versus 170,000. The result points to the labor market's continued resilience to the Fed's anti-inflationary measures in the form of interest rate hikes, but is seen as negative for risk assets including cryptocurrencies.

The market interprets these data as a new threat of a possible 25 basis point interest rate hike on November 1. The probability was 25% yesterday and 31.3% today. The Fed had previously expected the pause to be until June 2024, and now expects the pause to be until July 2024. Market futures just fell 400+ points after the report was released. This is not what the Fed wants to see.

Looking at Bitcoin’s specific reaction, popular trader Skew showed spot and derivatives traders exiting on NFP. Trader Daan Crypto Trades updated his analysis from earlier in the day, highlighting the decline in Bitcoin’s open interest (OI). This has previously reached levels that have previously triggered both upside and downside volatility.