Bitcoin rests at $28K as US jobs data boosts new Fed rate hike bets

Bitcoin (BTC) showed little interest in moving higher at the April 7 Wall Street open as fresh United States macro data boosted bets on further interest rate hikes.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Analyst: Fed will keep hiking “until something breaks”

Data from TradingView followed BTC/USD as it drifted around $27,900 on Bitstamp.

U.S. nonfarm payrolls figures, the main macro data focus of the week, came in slightly below expectations, indicating unemployment rising more slowly than predicted.

This in turn raised market expectations that the Federal Reserve would persist in raising interest rates to combat inflation — at the expense of crypto and risk asset performance.

The odds of another 25-basis-point rate hike in May topped 70% on the day, according to CME Group’s FedWatch Tool, having previously circled 50%.

“Another strong jobs report. Likely fuels speculation of a 25bps hike in May,” analytics resource Tedtalksmacro reacted on Twitter.

Fed target rate probabilities chart. Source: CME Group

Caleb Franzen, senior market analyst at Cubic Analytics, concluded that this and other recent employment data showed that there were not “any major holes in the labor market data (yet).”

“They’re going to keep going until something breaks,” he continued about Fed policy in part of a follow-up analysis on Twitter.

“So far, the banks are chilling & intervention has worked. Depositors aren’t worried. The labor market is still too resilient and inflation is too high, though it’s decelerating. Disinflation is fully underway, but the Fed is bound by their own handcuffs.”

Just ahead of the report, monitoring resource Material Indicators uploaded order book data from Binance, which showed strengthening liquidity nearer the spot price.

This was apt to further “dampen” volatility.

BTC/USD order book data (Binance). Source: Material Indicators/Twitter

Dollar bounces with stocks

Elsewhere, U.S. equities traded up on the day, with the S&P 500 and Nasdaq Composite Index gaining 0.4% and 0.8%, respectively, at the open.

The U.S. dollar managed an uncharacteristic copycat bounce, meanwhile, heading back above the 102 mark to hit its highest levels in several days.

“$USD strength still showing up fresh higher-high after the NFP report,” analyst James Stanley wrote in part of a Twitter response.

“$DXY reacting with strength to data that isn’t necessarily all that strong.”

U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView
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