Crypto Market Experiences Short-Term "Shakeout" Amidst Traders Optimism
The crypto market experienced a notable selloff on June 7th, triggered by unexpectedly strong U.S. employment data. Bitcoin and Ethereum saw declines of nearly 2% and over 3%, respectively. Despite the dip, traders view it as a temporary "shakeout" rather than a trend reversal, maintaining optimism for a continued broader uptrend.
On June 7th, the crypto markets encountered a significant selloff following the release of better-than-expected U.S. employment data. Bitcoin saw a drop of nearly 2%, while Ethereum experienced a decline of over 3%. Despite these fluctuations, many traders perceive this as nothing more than a temporary "shakeout" before the broader uptrend resumes.
The catalyst for this downturn was the U.S. Employment Situation Summary, which revealed the addition of 272,000 new jobs in May. Contrary to predictions that a weaker report would prompt the Federal Reserve to ease inflation-fighting measures, the positive job numbers cast doubt on such expectations, impacting crypto prices.
Markus Thielen, Head of Research at 10x Research, had previously noted that a weaker jobs report could lead to rate cuts and potentially propel Bitcoin to new all-time highs. However, Thielen believes that while the jobs data didn't directly cause the crypto dip, it presents a mixed picture. He pointed out that although the unemployment rate increased to 4.0%, the upside surprise in job additions was primarily driven by an uptick in part-time workers.
Chart by TradingView
Impact on Altcoins
Altcoins bore the brunt of the downturn, with Pepe plummeting over 10%, Solana experiencing a drop of almost 5%, and Dogecoin tumbling nearly 8%. Nonetheless, many traders maintain a bullish long-term outlook.
Popular crypto analyst il Capo of Crypto took to Twitter, stating, "Strong sell-off into support. Looks like a shakeout." This sentiment echoes the belief among traders that while the recent dip may be unwelcome, it represents a minor obstacle on the path to broader crypto adoption and higher prices in the coming months.
Looking Ahead: The market's ability to bounce back from this downturn will serve as a crucial test for the bullish scenario, reaffirming the resilience and potential of the crypto market amidst short-term volatility.
Start automated trading on Cryptohopper today and enjoy a 3-day free trial!
