Payrolls-Led Bitcoin, Ether Price Swoon Is ‘Buy the Dip’ Opportunity, Crypto Trading Firm Advises
BTC and ETH’s recent drop in price following the release of the payrolls report presents a favorable opportunity to “buy the dip,” according to cryptocurrency trading firm QCP. The firm believes that the Federal Reserve will struggle to ignore the interest-rate cuts implemented by the G7 countries. Bitcoin and ether have experienced a decline in momentum since the release of the stronger-than-expected U.S. jobs data, which dampened hopes for a Fed rate cut in September. QCP Capital, based in Singapore, suggests that this price swoon provides a chance for investors to acquire cryptocurrencies at a discounted value. The U.S. economy added a substantial 272,000 jobs in May, higher than the estimated 185,000 and April’s revised figure of 165,000. Although the unemployment rate increased slightly to 4%, average hourly earnings rose above expectations. Consequently, the likelihood of a 25 basis-point Fed rate cut in September fell from 85% to 60%, causing risk assets, including cryptocurrencies, to decline. JPMorgan and Citi have retracted their forecasts for a Fed rate cut in July, and some experts are even considering rate increases or additional tightening measures. Bitcoin, which was approaching a breakout above $72,000, fell by nearly 3% to $68,400. Ether and the CoinDesk 20 index mirrored bitcoin’s movement. QCP Capital suggests that the Fed will face difficulties maintaining higher rates while other central banks reduce borrowing costs. The firm believes that the markets will increasingly anticipate at least one Fed rate cut moving forward, making it challenging for the U.S. to disregard the rate cuts implemented by the rest of the world. Last week, the European Central Bank and the Bank of Canada reduced rates, signaling the start of an easing cycle among the G7 countries. MacroMicro reports that the number of central banks implementing rate cuts has increased this year. As a result, other central banks, including the Fed, may soon engage in competitive rate reductions (commonly referred to as currency wars) as a means to manage their growing public debts, inadvertently stimulating demand for alternative investments such as cryptocurrencies. QCP Capital claims to have observed bullish flows during this dip, with sellers of aggressive puts and buyers of call spreads, particularly in BTC.