Market News

US Markets Rally as Bitcoin Surges to New Highs Amid Rate Cut Speculation

Bitcoin has reached a new 10-week high, surpassing $97,000, following stronger-than-expected US labor market data.

The Department of Labor reported that 177,000 jobs were added in April, exceeding the forecast of 140,000, which has implications for the Federal Reserve's interest rate decisions.

Despite the positive labor report, calls for a rate cut from former President Donald Trump have intensified, as he argues for lower rates to alleviate consumer pricing pressures.

While Bitcoin has responded positively, the resilient labor market could reduce the likelihood of immediate liquidity injections that typically benefit crypto assets.

Nonetheless, Bitcoin's rise stands in contrast to traditional equities, with the S&P 500 and Nasdaq Composite both showing gains of over 1.3% on the same day.

Analysts speculate that Bitcoin may lead a recovery, as signs of easing inflation could spur the Fed to consider rate cuts, which would favor alternative assets more than stocks.

The recent contraction in the US economy and a decrease in the Core Personal Consumption Expenditures (PCE) inflation indicator have further fueled hopes for a dovish Fed stance.

Bitcoin has notably outperformed traditional markets, gaining over 13% amid rising enthusiasm among crypto investors.

As traders keep a close eye on liquidity responses, there are warnings that current bullish momentum could be a temporary setup before a potential drop.

Market participants are poised for a pivotal week ahead as the next Federal Reserve meeting approaches, where rate decisions will be scrutinized closely.