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EU Elections and Fed Scare Investors – Here’s What That Means for Crypto – DL News
- A stronger-than-expected US job market is weighing on crypto.
- Traders now look to U.S. inflation data and a Federal Reserve policy meeting on Wednesday.
Bitcoin wavered again on Monday after the euro and risk assets fell amid gains by far-right parties in the European Parliament elections.
French President Emmanuel Macron called early national elections, increasing political uncertainty.
“The market is seeing political risk premiums arising from these election results,” Neil Wilson, chief analyst at Markets.com, said in a note to clients.
“There are also questions about support for Ukraine and much more. You can see why the market reaction is instinctive.”
Bitcoin fell on Friday after May nonfarm payrolls surpassed analyst estimates, creating 272,000 new jobs. The report dampened expectations that the Federal Reserve will cut rates this year.
“Risk sentiment was always going to be a little weak after Friday’s nonfarm payrolls,” Wilson said.
Lower interest rates are typically bullish for risky assets like stocks and cryptocurrencies.
On Wednesday we will see crucial data on US inflation, along with a Fed policy meeting that could signal whether a rate cut is on the cards.
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Higher-than-expected inflation data reduces the likelihood of a rate cut, adding to Bitcoin’s woes.
But some believe a Fed pivot is a done deal.
BitMEX co-founder Arthur Hayes last week pointed to rate cuts by the Bank of Canada and the European Central Bank as a sign that monetary policy in the US will be loosened soon.
“The trend is clear,” Hayes said. “The crypto bull is waking up and is about to rip the skin off profligate central bankers.”
Crypto Market Movers:
- Bitcoin fell 0.4% in the last 24 hours to $69,302.
- Ethereum fell 0.6% to $3,669.
What we are reading:
Tim Craig is a DeFi correspondent at DL News. Have a tip? Email him at tim@dlnews.com.