Bitcoin falls as strong US jobs signal more Fed rate hikes

Historically, October has been a month of positive price action for Bitcoin (BTC), which even led to a popular “Uptober” meme.

However, by the end of the first full week of the month, BTC has fallen from $20,146 to as low as $19,550 on Friday, down 3% over the past day. Since then, the leading cryptocurrency has recovered somewhat and is now changing hands at $19,648 according to CoinGecko.

Several large coins including Solana (SOL), Dogecoins (DOG), avalanche (AVAX) and Litecoin (LTC) also saw losses of between 3% and 4% as the market cap of the entire crypto market fell below the $1 trillion mark.

Among the ten largest cryptocurrencies, those are the least affected XRP and Cardano (ADA), which are down 0.6% and 0.8% respectively.

ether (ETH), the second largest cryptocurrency by market cap, is down 1.2% on the day to trade at $1,331 per CoinGecko.

Coffin nail for further rate hikes

The renewed trend reversal follows the September jobs report from the US Department of Labor that showed the US economy added another 263,000 jobs, with the unemployment rate falling 0.2 percentage point to 3.5%.

Although job growth slowed from the 315k increase in August and posted the lowest monthly increase since April 2021, the US economy is still strong.

This strength is likely to increase the likelihood of more aggressive monetary tightening ahead of the Fed’s next November meeting.

US Treasury yields jumped after the data was released, in contrast to equities, which opened lower on Friday.

“That puts the nail in the coffin for another 75 [basis point rate increase] in November,” Jeffrey Roach, chief economist at LPL Financial, told CNBC.

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