Summary
- Bitcoin’s price surged above $63,000, folowing an unexpected drop in US weekly jobless claims.
- Yesterday, the US Fed decided to cut interest rates by 50 bps.
According to official reports, the number of Americans filing new applications for unemployment benefits dropped last week, which suggested a job growth pick up this month.
The number of initial jobless claims in the US for the week ending on September 14 was 219,000, the lowest since the week ending on May 18, 2024. The expected number was 230,000-231,000.
Reuters press agency noted that the labor market cooled significantly with a step down in hiring and a decrease in job openings which raised concerns of a deterioration in conditions that could undermine economic expansion. Layoffs currently remain at a low level.
Bitcoin’s price surged above $63,000 following today’s report on US weekly jobless claims that unexpectedly dropped.
BTC Price Above $63,000
At the moment of writing this article, BTC is trading above $63,000, up by over 5% in the past 24 hours.
Earlier, BTC’s price surged above $62,000 following yesterday’s decision of the US Fed to cut interest rates by 50 bps.
US Fed’s Interest Rate Cut Prompted a BTC Rally
Yesterday, the Federal Reserve in the US decided to cut interest rates by 50 bps, triggering a BTC and crypto rally. Greeks.live noted that implied volatility of crypto options declined significantly across all maturities, and ultra-short-term IVs dropped by over 25%.
This year, there will be two more FOMC meetings on November 8 and December 19, and the market expects a cumulative 100 bps rate cut.
The crypto market volatility is expected to rise in November due to the US elections scheduled for November 5.
Bitcoin recorded increased volatility this week ahead of the FOMC meeting, seeing a significant price surge afterward.
US Rate Cut Trajectory’s Impact on Bitcoin
Lookonchain analyzed the Fed’s rate cuts and hikes’ impact on the price of BTC, concluding that the highest impact was between 2020 and 2022.
This was a period when the US Fed slashed interest rates in the US, starting at the beginning of the covid pandemic in March 2020.
CNBC mentioned that besides the emergency rate cut reductions at the beginning of the covid pandemic, the last time the Fed decided to cut interest rates was in 2008 during the global financial crisis.