It was a sea of red in the crypto industry on Friday after Bitcoin price dropped below the crucial support of $55,000.
Most altcoins like Ethereum (ETH), Solana (SOL), and EOS dropped by over 10% in the past 24 hours. The total market cap of all coins fell from the year-to-date high of $2.7 trillion to $2 trillion.
Ethereum vs Solana vs EOS prices
US nonfarm payrolls (NFP) data
The falling crypto prices received another blow when the US published another solid nonfarm payroll (NFP) data. According to the Bureau of Labor Statistics (BLS), the economy added 206,000 jobs in June, higher than the expected increase of 191,000.
This figure was also higher than the ADP report on Wednesday, which showed that the private sector added 150,000 jobs in July.
The report also showed that wage growth remained steady in June as the average hourly earnings growth rose by 3.9% YoY. On the negative side, the unemployment rate increased from 4.0% in May to 4.1% in June.
These numbers mean that the labor market is doing well since it has added over 1.57 million jobs this year.
Implications for Ethereum, Solana, and EOS prices
These job numbers mean that the Federal Reserve will not be in a hurry to start cutting interest rates since inflation has mostly remained steady this year. The most recent data showed that the headline Consumer Price Index (CPI) slowed to 3.3% in May while the Personal Consumption Expenditure (PCE) remained at 2.5%.
In a statement this week, Jerome Powell, the Fed Chair, noted that the bank wants more evidence that inflation is falling. Minutes released this week showed that the committee anticipates one rate cut this year, possibly in December.
Therefore, the hawkish Federal Reserve will likely put more pressure on risk assets like Ethereum, Solana, EOS, and Bitcoin prices.
This trend will come at a time when these coins are battling other risks. Bitcoin has already dropped below the neckline of its big double-top pattern, signaling more downside.
Germany has started liquidating its Bitcoin holdings, leading to an increase in balances on exchanges. Additionally, wallets associated with Mt.Gox have also started moving their coins.
On top of this, the US political scene is changing, with the odds that Joe Biden will drop out rising. If he does, he will likely be replaced with a younger candidate with a higher chance of beating Donald Trump, who is seen as a more favorable president for the crypto community.
Therefore, with cryptocurrencies facing weak technicals and fundamentals, there is a possibility that they will continue falling in the near term.
