Bitcoin Plummets to Six-Month Low Amid Fed Rate Cut Doubts & Strong US Jobs Report; Crypto Market Sees Broad Decline

Bitcoin Hits Six-Month Low as Fed Rate Cut Doubts & Strong US Jobs Data Impact Market

Bitcoin experienced a significant downturn on Thursday, hitting its lowest price point in over six months. The leading digital currency dipped to as low as $86,325.81, a level not seen since April 21st, before slightly recovering to $86,690.11. This decline is largely attributed to investors reducing their exposure to riskier assets, coupled with growing uncertainty surrounding the Federal Reserve's potential interest rate cut next month.

US Jobs Report Dampens Rate Cut Hopes

The prospects of a December rate cut by the Federal Reserve were considerably dampened by the release of stronger-than-expected U.S. jobs data. The U.S. economy remarkably added 119,000 jobs in September, significantly surpassing the 50,000 economists polled by Dow Jones had anticipated. This robust jobs report subsequently lowered the probability of a December rate cut to approximately 40%, according to the CME Group's FedWatch tool.

Broader Crypto Market Decline

Bitcoin's fall was not an isolated event but rather indicative of a broader market contraction across the cryptocurrency landscape. Other major digital assets also felt the pressure: XRP saw a 2.3% decrease, trading below $2.00, while Ether shed over 3%, dropping well below $3,000. Dogecoin, however, remained stable.

Interconnected Markets: Crypto, Stocks, and AI

Interestingly, Bitcoin's slump also coincided with a dip in stock markets, despite a stellar earnings report from Nvidia. This correlation highlights a trend among traders who often invest heavily in both AI-related stocks and Bitcoin, creating interconnected market movements. The recent price slide for Bitcoin has also been influenced by a series of cascading liquidations of highly leveraged crypto positions that began in early October.