The cryptocurrency market, including Bitcoin (BTC), Ethereum (ETH), and various altcoins, experienced a significant downturn on June 7 after U.S. employment data surpassed expectations. Despite the initial dip, many traders believe this is merely a “shakeout” before the market resumes its upward trajectory.
Pseudonymous crypto trader il Capo of Crypto, who has 848,000 followers on X (formerly Twitter), commented on the market movement, noting, “Strong sell-off into support. Alts suffered more.” They suggested that this “looks like a shakeout,” a term used to describe a scenario where a large number of investors sell off simultaneously, often triggered by market or economic uncertainties.
The sell-off coincided with the release of the U.S. Employment Situation Summary Report, which revealed a higher-than-expected increase in jobs for May. This contradicted the predictions of some crypto analysts who had anticipated that weaker employment data would pressure the Federal Reserve to consider lowering inflation rates, potentially driving Bitcoin to new highs.
Markus Thielen, head of research at 10x Research, had previously speculated on June 5 that a weaker employment report could lead to rate cuts. He suggested that if the Consumer Price Index (CPI) for the year-on-year rate was 3.3% or lower, it would likely push Bitcoin to all-time highs. However, the actual employment data painted a different picture, showing mixed signals that Thielen believes did not directly cause the crypto market drop.
“Crypto sold off at the end of Friday without a determining catalyst,” Thielen stated. He explained that the U.S. employment data was “mixed,” with the unemployment rate climbing to 4.0% despite an increase in the number of jobs added, which was primarily attributed to a rise in part-time workers.
The U.S. Bureau of Labor Statistics reported an increase of 272,000 jobs in May, while the unemployment rate edged up by 0.1%. This mixed data contributed to a complex economic outlook, leading to uncertainty in the crypto market.
Despite the broader market downturn, Bitcoin remained flat over the past 24 hours, settling at $$69,39. Ethereum declined slightly, dropping by 0.53% to $3,669. Over the past week, altcoins faced even steeper losses, with Pepe plunging 18%, Solana falling 3.7%, and Dogecoin tumbling 10.7%, according to data from CoinMarketCap.