Markets
$500M in Bitcoin Open Interest Erased After US Jobs Report
The recent US jobs report significantly impacted the cryptocurrency market, wiping out over $500 million in Bitcoin open interest.
This drastic market movement comes after mixed signals from the latest employment data.
US Jobs Report Reduces Open Interest in Bitcoin
The US Bureau of Labor Statistics reported that May saw an increase in hiring by 272,000 in the establishment survey. However, the household survey indicated a drop in employment and an increase in unemployment, which rose to 4.0% — the highest since January 2022.
Average weekly hours remained stable at 34.3, which often aligns with a weak economy. Additionally, average hourly earnings increased 0.4% in May, marking a 4.1% increase from the previous year.
Private sector hiring has averaged just over 200,000 new jobs per month over the past three to six months, a notable increase from the 155,000 jobs recorded at the end of the previous year. The aggregate weekly payroll index for private sector workers, which combines hires, wages and hours, has increased 5.4% over the past 12 months. This is a decline from the 6%-6.5% range seen a year ago, bringing it closer to the 2018 highs for the 2009-2020 cycle.
After the release of the report, Bitcoin Price saw a 2% correction, dropping from $72,144 to $70,668. This sudden price movement triggered significant liquidations.
“More than $500 million in Bitcoin open interest was wiped out in minutes. Shorts and the longs were liquidated”, IT Tech observed.
Open Interest on Bitcoin. Source: Trading View
The mixed signals from the jobs report caused significant fluctuations in the market. While an increase in hiring suggests economic strength, the increase in unemployment and constant weekly schedules indicate underlying weaknesses.
The reaction of crypto market reflects its sensitivity to macroeconomic indicators, but may soon reverse.
“Unemployment has reached its highest level since COVID and markets have plummeted. Often the first step in these ads is wrong. Time will tell. But it certainly appears that unemployment has reached its lowest level now, which suggests that US liquidity will have to increase more and more soon. Rate cuts coming,” Charles Edwards, founder of Capriole Investments, commented.
See more information: How to protect yourself from inflation using cryptocurrency
As investors digest the implications of the latest jobs report, Bitcoin and other digital assets are likely to remain volatile.
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