Bitcoin Drops on US Jobs Report, But On-chain Metrics Still Bullish

Strong U.S Jobs Report

• The US economy added a whopping 517,000 jobs last month, way above the expected job gain of 190,000
• The household survey showed the unemployment rate dropping to a new more than five-decade low at 3.4%
• Average hourly earnings continued to grow at a solid YoY pace of 4.4%, a little above expectations

Bitcoin Reacts to Jobs Report

Friday was a choppy day in the Bitcoin market with prices swinging between gains and losses after traders digested the latest stronger-than-expected US labor market report for last month. On one hand, yields across the US treasury curve and the US dollar surged as investors bet that the Federal Reserve is able to achieve its much hoped-for “soft landing”. On the other hand, Bitcoin was unable to sustain a rally and is currently lower on the day.

Risk of Big Revisions Ahead

A senior economist at BMO Capital Markets commented that though this report raises serious doubts about recession, there is still risk of big revisions ahead due to changes in mix. Some analysts also expressed skepticism regarding the headline NFP number due to possible future revisions.

Bumpy Ride Likely for Bitcoin

Many crypto traders and analysts opined via social media that there could be further downward pressure on Bitcoin given these developments, predicting “a lower high then Bitcoin will get sent”. Despite an initial intra-day recovery, it looks like investors are still cautious about whether or not this strong jobs report can lead to an actual soft-landing for Fed policy tightening without causing a recession and widespread job losses.

Onchain Metrics Still Bullish

Despite these short term concerns however, several prominent onchain metrics continue to point towards ongoing strength in fundamentals underlying bitcoin as an asset class – such as record levels of institutional investment activity and miner capitulation – which suggest that long term uptrend remains intact even if short term turbulence could be on its way soon.