Fed rate-hike bets fade as BTC & ETH surge
A weaker US jobs report is fading Fed rate-hike bets and lifting crypto risk appetite. The US added 57,000 nonfarm jobs in June, far below expectations. The US dollar index (DXY) slid toward two-week lows after the data, pulling back rate-hike pricing.
CME FedWatch shows the shift clearly: odds of a September rate hike fell from about 65% before the July 2 report to around 50% afterward. This macro turn helped BTC and ETH rebound sharply.
Bitcoin traded as low as $57,750 on Tuesday during rate-hike anxiety, then recovered to about $61,600 by Friday (+6.5% in days). Ether rose even more, up 11.5% from its Tuesday low over the same period, outperforming BTC. The rally also spread beyond majors, with altcoins including ADA, ZEC, and DASH posting gains after the jobs release.
For traders, the key takeaway is that Fed rate-hike bets have loosened, but policy hasn’t flipped yet. A hot next jobs print or an upside inflation surprise could quickly revive dollar strength and pressure crypto. Still, this week’s move suggests short-term momentum could favor bulls while markets reassess how far tightening has to go.
Bullish
The article links the rebound to a clear macro trigger: weaker nonfarm jobs cooled Fed rate-hike bets, pushing the dollar lower (DXY near two-week lows). Crypto typically benefits when USD funding conditions and real-rate expectations ease, and the price action matches that pattern.
Short term: BTC and ETH reacted quickly (BTC +6.5%, ETH +11.5%), suggesting traders are actively rotating back into risk assets as the probability of near-term tightening decreases (from ~65% to ~50% for a September hike). If follow-up data stays soft, this can support further upside momentum.
Medium/long term: the rally may still run into uncertainty because Fed rate-hike bets are not “zero”—policy hasn’t changed. If inflation or the next jobs report surprises to the upside, historical episodes like “hawkish data flips” often cause BTC to retrace as the dollar and yields re-strengthen. Traders should watch DXY/JPY, CPI, and subsequent labor prints for confirmation or reversal.
Net effect: positive for sentiment and near-term flows, but with event-risk remains elevated around the next inflation/jobs releases—so it’s bullish as long as the rate-hike narrative continues to fade.