Recent data from the US has caused a significant shift in the market outlook, leading to an increase in cryptocurrencies. The employment data released on Friday was below expectations, with Non-Farm Employment coming in at 175,000 instead of the expected 240,000. Despite this, the Federal Reserve’s dovish outlook and Quick Rate Adjustment (QRA) have supported the rise in cryptocurrencies.
The unemployment rate in the US increased slightly to 3.9%, contrary to expectations of 3.8%. Additionally, the Monthly Average Hourly Earnings remained below the expected 0.3%, marking 0.2%. These figures indicate diminishing inflation concerns and will influence future monetary policies.
Simultaneously, the Federal Reserve’s and the Treasury’s dovish positions have led to a significant shift in interest rate expectations, resulting in a decrease in US 2-year yields from over 5% to approximately 4.7%. Investors are now anticipating interest rate cuts in the coming year, which may lead to a more positive view of a softer dollar in the money market.
The crypto market has responded positively to these market movements. As a result, there have been significant net inflows of $378.3 million in Bitcoin spot Exchange Traded Funds (ETFs). The renewed interest in cryptocurrencies, particularly with the Grayscale Bitcoin Trust (GBTC) experiencing its first positive inflow, has garnered significant attention.
Despite the positive outlook on interest rate cuts, individual investors are still hesitant to enter the market, especially in cryptocurrencies. However, this situation suggests that there could be a potential market recovery for altcoins, which is expected to begin after the summer months.
In the past, the return of individual investors to the market, coupled with the increase in value of smaller altcoins, has indicated market activity in the crypto space. This pattern presents an opportunity for those looking to position themselves before larger investors enter the market.
Additionally, according to an analyst, the market value of altcoins is hinting at a technical formation that could trigger a significant price movement. The total Altcoin Market Value, which is showing an inverse head and shoulders formation, suggests a potential rise in market value, possibly reaching 4 trillion dollars.
It is important to note that the information provided in this article does not constitute investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and should conduct their own research.
