Traders View Crypto Market Downturn as Short-Term “Shakeout”

Crypto Market Experiences Temporary Selloff

On June 7th, the crypto markets experienced a sell-off following the release of stronger-than-expected U.S. employment data. Bitcoin dropped approximately 2%, while Ethereum declined over 3%.

The catalyst for the decline was the U.S. Employment Situation Summary, which revealed the addition of 272,000 new jobs in May. This contradicted predictions that a weaker report could prompt the Fed to ease inflation-fighting measures and boost crypto prices.

"A weaker surprise could lead to rate cuts, which would likely propel Bitcoin to new all-time highs," Markus Thielen, Head of Research at 10x Research, stated before the data release.

Thielen believes the jobs numbers did not directly trigger the crypto dip, but they provide a nuanced picture. "The unemployment rate rose to 4.0%, but the increase in jobs was a positive surprise, primarily driven by a surge in part-time work."

Altcoins were particularly affected by the downturn, with Pepe losing over 10%, Solana declining nearly 5%, and Dogecoin falling close to 8%. However, many traders remain optimistic about the long-term prospects for cryptocurrencies.

"Strong sell-off into support. Looks like a shakeout," tweeted il Capo of Crypto, a prominent crypto analyst.

While the recent volatility may be concerning, the prevailing sentiment is that it is a minor setback on crypto's path towards wider adoption and price appreciation in the coming months. The market's ability to recover from this dip will be a crucial test for the bullish case.