Unemployment Rate Rises, Rate Cut Expectations Resurface, Cryptocurrency Market Spreads Fear of Mt. Gox Selling Pressure

Yesterday's unexpected increase in the U.S. unemployment rate raised investor expectations of a rate cut in September, leading to a broad rally in major U.S. stock indices, with the S&P 500 and Nasdaq hitting new highs. However, it was a tough day for the crypto community, as selling pressure and panic were triggered by Mt. Gox officially beginning its reimbursements. The top ten tokens by market value all experienced a significant decline. Currently, the Fear and Greed Index has reached 29, indicating that the market is engulfed in fear.

US Unemployment Rate Surprisingly Rises, Boosting Rate Cut Expectations for September

According to a report by CNBC, the US nonfarm payrolls increased by 206,000 people yesterday, surpassing the expected 200,000, but falling short of the revised 218,000 in May. However, the unemployment rate unexpectedly climbed to 4.1%, the highest level since October 2021.

Although policymakers hoped to see more progress on inflation before lowering rates, the deterioration in the labor market may increase the urgency for a rate cut. According to the FedWatch tool by CME Group, traders increased their bets on a rate cut in September after the employment report on Friday, with the probability of a rate cut rising from 64% a week ago to around 75%.

Mt. Gox Begins Repayments, Heavy Selling Pressure on BTC

Yesterday was a tough day for the crypto community as Bitcoin faced selling pressure and panic triggered by recent Bitcoin outflows by the German government and Mt. Gox officially starting repayments to creditors. Bitcoin plummeted from above 58K in the early morning to a low of $53,485.

Mt. Gox started repaying debts with Bitcoin (BTC) and Bitcoin Cash (BCH)

Even the bullish cryptocurrency trader Ali Martinez changed his view to bearish, citing the Fear and Greed Index at 29, indicating fear dominating the market. He believes Bitcoin must reclaim the $61K neckline to restart its uptrend. Otherwise, lacking significant support below, the key support level is now at 47K.

BTC Breaks Below 60K! Bitcoin Head and Shoulders Pattern Complete, Time to Escape or Buy the Dip?

No News on ETF, ETH Gives Back Gains Since May

Ethereum also faced a sell-off yesterday, dropping to a low of $2,810. With no further catalysts for the Ethereum spot ETF, it retraced all gains made since May.

Similarly, the top ten tokens by market capitalization experienced a broad decline, with marginal recovery post the nonfarm payroll data release, failing to reach new highs like the US stock market.

BTC 55K ETH 2900! Market Continues to Collapse, On-Chain Transactions Surge, Sentiments Turn to Fear