The latest non-farm payroll report in the United States released on Friday night showed a staggering increase of 272,000 in May, far exceeding expectations. The market believes that the timing of the Federal Reserve’s first interest rate cut may be further delayed, with only about a 50% probability of a rate cut starting in September. QCP Capital stated that the unexpected surge in employment figures will trigger risk aversion next Wednesday before the release of US inflation data and FOMC.
The surprisingly strong non-farm payroll data has led to pessimistic market expectations of a further delay in interest rate cuts. As a result, all four major US stock indices closed in the red on Friday: the Dow Jones Industrial Average fell 87.18 points or 0.22% to close at 38798.99 points; the S&P 500 Index dropped 5.97 points or 0.11% to close at 5346.99 points; the Nasdaq Composite Index declined 39.99 points or 0.23% to close at 17133.13 points; and the Philadelphia Semiconductor Index fell 14.442 points or 0.27% to close at 5287.242 points.
Bitcoin also saw a significant drop of over 5% last night, falling below $68,300 from $71,997 initially. At one point, it rebounded slightly to $69,469, with a nearly 2% drop in the past 24 hours.
Ethereum experienced even greater volatility, dropping to a low of $3,568 at one point. At the time of writing, it was trading at $3,690, with a drop of over 3% in the past 24 hours.
According to CoinMarketCap data, the other top ten cryptocurrencies have generally declined in the past 24 hours, with Dogecoin (DOGE) experiencing the highest drop of over 7.5%, followed by SOL and XRP with drops exceeding 4%.
In the cryptocurrency market downturn, Coinglass data shows that in the past 24 hours, the total amount of liquidation in the entire cryptocurrency network exceeded $417 million (with long positions accounting for $361 million), resulting in over 149,000 people being liquidated.
QCP Capital pointed out in its latest market analysis that the unexpected surge in non-farm payrolls, accompanied by a rise in unemployment rates, has raised confusion. The data is enough to trigger risk aversion before the release of US inflation data and FOMC next Wednesday. However, they observed bullish capital flows during this downturn, including active sellers of put options and buyers of call spreads, especially in BTC. QCP Capital concluded that the market has already digested the expectation of a Fed interest rate cut, and the risks of high rates are gradually increasing.