The cryptocurrency market experienced a notable decline in anticipation of the US equities market opening on Monday, as analysts predict the Federal Reserve will pause its cycle of rate cuts following the release of last week's employment data. Bitcoin (BTC) suffered a drop of 3.4%, trading at approximately $91,090 just before market opening.
Ethereum (ETH) also saw a significant decrease of 5.9%, bringing its trading price down to $3,060. Overall, the global cryptocurrency market cap fell by 4.4%, settling at $3.15 trillion. Additionally, the CoinDesk Market Index reported a decrease of 3.3% over the past 24 hours. Government data unveiled on Friday indicated that total US nonfarm payrolls increased by 256,000 in December, while the unemployment rate dropped from 4.2% in November to 4.1%.
The consensus prediction suggested an increase of only 165,000 jobs, as per a Bloomberg survey. "Payroll growth has exceeded expectations significantly, coupled with a decrease in the unemployment rate from an already low figure, which diminishes the likelihood of an immediate Fed rate cut," stated Bob Schwartz, Senior Economist at Oxford Economics, in a note released on Friday.
He continued, "The Federal Reserve is now anticipated to maintain the current rate-setting cycle for several months, especially as a robust jobs report shows the economy's resilience to withstand the prevailing rates for the foreseeable future." In its last meeting, the central bank reduced its benchmark lending rate by 25 basis points, indicating fewer cuts are likely than initially projected in September.
Current analyses predict a 97% likelihood that the Fed will keep its policy rate steady later this month, an increase from 92% observed on January 6, according to data from the CME FedWatch tool. Last week, spot price bitcoin exchange-traded funds recorded total net inflows amounting to $307.2 million, pushing total net assets across the 11 ETFs up to $107.64 billion, based on data from research platform SoSoValue.
In contrast, their Ethereum counterparts faced approximately $185.9 million in outflows, resulting in total net assets falling to $11.61 billion. Among the standout performers, the ARK 21Shares Bitcoin ETF (ARKB), Bitwise Bitcoin ETF (BITB), iShares Bitcoin Trust (IBIT), and Fidelity Wise Origin Bitcoin Fund (FBTC) ranked among the top 20 US ETF launches of all time.
Analyst James Seyffart from Bloomberg shared his insights via the social media platform X on Friday, noting the ETFs began trading in the US on January 11, 2024. Looking ahead, this week's economic calendar features the producer price index for December set to be released on Tuesday, followed by the consumer price index for the same month on Wednesday.
Additionally, the retail sales report for the previous month is due on Thursday. The Beige Book, a comprehensive summary of economic and business activities from the twelve regional Fed branches, is expected to be released on Wednesday..