Crypto Markets Analysis: Bitcoin, Ether Trade Sideways as Jobs Data Remains Robust

Crypto markets chug along as a stubbornly tight labor market suggests that inflation will remain troublesome.

AccessTimeIconFeb 23, 2023 at 10:12 p.m. UTC
Updated Feb 23, 2023 at 10:35 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Crypto markets were trading mostly sideways, with some major tokens up a little but others falling slightly after the latest jobs data showed labor markets remaining stubbornly tight.

Initial jobless claims for the week ending Feb. 18 fell by 3,000 to 192,000 but arrived below the consensus estimate of 200,000. Strong jobs data has been thorny for the U.S. Federal Reserve in its efforts to reduce inflation rates from 6.4% to its target rate of 2%.

Strong jobs data, which is generally an economic boom, has counterintuitively weighed against asset prices because a strong employment environment leads to higher prices as organizations ratchet up wages to recruit and retain scarce talent.

Yet, bitcoin and ether shrugged off the latest reading to trade 0.50% and 0.40% higher, respectively, during the 13:00 UTC (8 a.m. ET) hour of release. Selling pressure increased throughout the remainder of the day on average volume, although both BTC and ETH recently remained in the green.

Other relevant economic data on Thursday showed that U.S. gross domestic product (GDP) grew at an estimated 2.7% in the second quarter, versus expectations for 2.9% growth.

Personal consumption expenditures (PCE) declined from 4.3% last month to 3.7%, above the consensus estimate of a 3.9% increase. This data point underscores that while inflationary pressures has moderated, it remains elevated.

The minutes from the Federal Open Market Committee’s (FOMC) latest meeting earlier this month, released on Wednesday, emphasized the same with more than 10 separate references to either inflation or wage growth as “elevated.” Crypto markets will continue to scrutinize the Federal Reserve governors’ evolving inflation prescriptions, particularly if price increases fall outside expectations.

Currently, the CME FedWatch tool is assigning a 75% probability to the FOMC boosting interest rates by 25 basis points during the upcoming March 22 meeting. A week prior, the probability was 85%, indicating that the likelihood of a more aggressive 50 basis point hike has increased.

Fed meeting minutes indicate that “a few participants” favored raising the federal funds rate by 50 basis points at the prior meeting. The more aggressive hike would “more quickly” bring the target rate to levels facilitating price stability.

(Highcharts.com)
(Highcharts.com)

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Glenn Williams

Glenn C Williams Jr, CMT is a Crypto Markets Analyst with an initial background in traditional finance. His experience includes research and analysis of individual cryptocurrencies, defi protocols, and crypto-based funds. He owns BTC, ETH, UNI, DOT, MATIC, and AVAX


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.