The positive sentiment of the crypto market, caused by the report of the head of the Federal Reserve on the disinflationary processes in the U.S. economy, is declining in anticipation of the report on the decline in the labor market. The fall in the crypto market contrasts with the positive sentiment caused by the recent decision of the Federal Reserve to raise its key interest rate (from 4.25-4.5% to 4.5-4.75%).
Explaining the decision, chairman of the Fed Jerome Powell said that for the first time, his institution would be able to discuss disinflationary processes in the US economy. Nevertheless, Powell confirmed that interest rates will not go down this year. This means that the gap between market expectations and the Fed’s position remains significant. Regardless, the market for digital assets seemed enthusiastic, which was reflected in the growth of the value of major cryptocurrencies by capitalization. However, the positive sentiment began to fade as the U.S. jobs report was awaited.
Additional concerns for crypto investors were raised by a report from ADP, which reported that hiring in January fell far short of expectations, with only about 100,000 new jobs created. Experts suggested that the U.S. economy may be heading into a recession, with the number of jobs falling and the unemployment rate rising. They believe that if the Non-Farm Payrolls data is worse than expected, it could affect the Fed’s plans.
As a result, the cryptocurrency market is now down: bitcoin is down more than 1.5% in the last 24 hours to $23,500, and ether is down 1.8% to the $1600 level. CNBC financial news columnist and Mad MoneyGram host Jim Cramer warned crypto investors against excessive activity and a possible drop in bitcoin prices amid the Fed’s decision.
