Fed Rate Hike Odds Plunge to 22% as Bitcoin Sees Dip Buying

The US labor market data released on October 5 revealed a significant cooling in employment growth, causing the odds of a Federal Reserve rate hike in October to plummet to 22%. This shift in the macro outlook was noted by QCP Capital, a crypto market maker, which attributed the weak data to a slower-than-expected increase in nonfarm payrolls, a higher unemployment rate, and a deceleration in annual wage growth.

The September nonfarm payrolls rose by only 29,000, far below the market forecast of 84,000. The unemployment rate increased to 4.2%, while the annual wage growth slowed to 3.0%, the lowest since May 2021. Additionally, the average job creation over the past three months dropped to 50,700, approximately one-third of the level seen a year ago.

As a result, Bitcoin is seeing dip buying in the $86,000 range, with a move above $87,200 potentially confirming a further uptrend. QCP noted that buyers are still stepping in on dips, with the cryptocurrency recovering to $86,700 after its rally stalled at $87,100 on October 2.

The Federal Open Market Committee minutes due on October 7, TOKEN2049 in Singapore on October 8-9, and the US consumer price index report on October 14 are expected to add to market volatility. The weekend liquidations across the crypto market were relatively limited at $62.7 million, with short positions accounting for 68% of the total.