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$500 Million in Bitcoin Open Interest Wiped Out After Latest US Jobs Report

source-logo  beincrypto.com 07 June 2024 14:47, UTC

The recent US jobs report has significantly impacted the cryptocurrency market, wiping out over $500 million in Bitcoin open interest.

This drastic market movement comes after mixed signals from the latest employment data.

US Jobs Report Slashes Bitcoin Open Interest

The US Bureau of Labor Statistics reported that May saw an increase in hiring by 272,000 in the establishment survey. However, the household survey indicated a drop in employment and a rise in unemployment, which climbed to 4.0% — the highest since January 2022.

Average weekly hours remained steady at 34.3, which often aligns with a soft economy. Additionally, average hourly earnings rose by 0.4% in May, marking a 4.1% increase from a year earlier.

Private sector hiring averaged just over 200,000 new jobs per month over the last three to six months, a notable increase from the 155,000 jobs seen at the end of the previous year. The index of aggregate weekly payrolls for private-sector workers, which combines hiring, wages, and hours, was up 5.4% over the last 12 months. This is a decline from the 6%-6.5% range observed a year ago, bringing it closer to 2018’s highs for the 2009-2020 cycle.

Following the report’s release, Bitcoin’s price saw a 2% correction, dropping from $72,144 to $70,668. This sudden price movement triggered significant liquidations.

“Over $500 million of Bitcoin open interest wiped out within minutes. Shorts and longs were liquidated,” IT Tech noted.

Bitcoin Open Interest. Source: TradingView

The job report’s mixed signals have caused significant market fluctuations. While an increase in hiring suggests economic strength, the rise in unemployment and steady weekly hours indicate underlying weaknesses.

The reaction from the crypto market reflects its sensitivity to macroeconomic indicators but could soon revert.

“Unemployment just hit the highest level since COVID, and markets whipsawed down. Often, the first move on these announcements is the wrong one. Time will tell. But it for sure looks like unemployment has bottomed now, which suggests US liquidity will need to rise and rise soon. Rate cuts incoming,” Charles Edwards, founder at Capriole Investments, commented.

Read more: How to Protect Yourself From Inflation Using Cryptocurrency

As investors digest the implications of the latest jobs report, Bitcoin and other digital assets will likely remain volatile.