Key Reason Why Bitcoin (BTC) Price Just Plunged
Bitcoin, the world's leading cryptocurrency, recently witnessed a swift price drop, plunging to $27,715 on the Bitstamp exchange after shedding approximately 2% of its value in just a matter of minutes. Analytics firm 100eyes Crypto Scanner issued an abnormal volatility alert in response to the drop.
Another blockbuster jobs report
The recent U.S. jobs data is believed to be the culprit behind the recent price drop. The job market showed its strength in September with the Labor Department revealing an addition of 336,000 jobs, the most significant surge since January.
The figures far exceeded analysts' forecasts and showed a consistent upward trend, with the U.S. averaging a gain of 266,000 jobs per month over the past three months. Several sectors, including leisure and hospitality, saw considerable gains.
Alex DovbnyaThese robust jobs numbers have impacted long-term bonds, leading to a sell-off and pushing yields to their highest in 16 years.
The better-than-expected jobs data might prompt the Federal Reserve to hike interest rates even higher, which explains the Bitcoin price dip.
Silver lining?
Mike Bucella, former general partner at BlockTower, recently opined that rising interest rates could be a double-edged sword.
On the downside, Bucella noted that as rates climb, risk assets, including crypto, tend to decline.
However, on the optimistic side, rising rates further bolster the cycle's primary use case: on-chain USD. There is an evident spike in demand for on-chain treasuries, painting them as a stable and appealing asset.
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