Saturday, February 4

  • In December, the Fed wasn’t aggressive with rate hikes as it has been in most months of 2022 when it hiked rates by 75 basis points. It only hiked rates by 50 basis points last month.
  • Our current data shows that the combination of SOL and ADA’s prices soared by more than 30 percent late last night.

BTC now trades at the $17,000 level for the first time this year, soaring in prices like bonds and stocks following indications that the US Fed may slow down its aggressive rate tightening. The Non-Farm Payroll reports from the bureau of labor statistics (BLS) were supposed to be the significant determinant of the inflation rate hike by the US Fed.

However, the price surge in BTC, stocks, and bonds happened 90 minutes after last month’s sharp drop in the ISM non-manufacturing index. The ISM services index dropped from 56.5 to 49.6. A figure below 50 indicates economic contraction, and it’s the first time the ISM services index won’t exceed 50 since May 2020.

Insights from December jobs report

Also, the new orders subindex in the NonFarm Payrolls December report dropped sharply from 56 to 45.2. Meanwhile, the ISM services index was less than 50 for the second month, as its index for December was 48.4. The crucial factors in the December Non-Farm Payrolls report were better than analysts’ forecasts.

For instance, the unemployment rate was 3.5 percent compared to analysts’ prediction of 3.7 percent, while there were additional 223,000 jobs, 23,000 higher than analysts’ forecasts. However, the additional jobs were significantly reduced compared to the 300,000, which was often the case until June 2022. Furthermore, the number of 223,000 new jobs is the lowest since April 2021.

In contrast, the wage increase was less than experts’ predictions, with year-on-year wages up by 4.6 percent as against predictions of 5.0 percent. While analysts predicted a 0.4 percent increase in average hourly earnings, the non-farm reports show that the earnings were up 0.3 percent. Prices of bonds and stocks started soaring following the release of the ISM report and have remained so.

At the time of writing, the 10-year bond yield is at 3.56 percent after dropping 16 basis points, while Nasdaq is up by about 3 percent. In December, the Fed wasn’t aggressive with rate hikes as it has been in most months of 2022 when it hiked rates by 75 basis points. It only hiked rates by 50 basis points last month. Hence, traders predict that the US apex bank might hike rates by only 25 basis points during its February monetary policy meeting.

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BTC’s price surge started late on Friday, but it hasn’t been smooth sailing. However, the leading digital asset traded at the $17,000 mark for the first time in 21 days. While issues within the crypto market have affected BTC’s price, its price action has mainly been affected by the Fed’s aggressive rate hikes. Thus, BTC’s price surge may continue if the Fed stops hiking rates aggressively.

Sol and ADA set monthly highs

Meanwhile, our current data shows that the combination of sol and ADA’s price soared by more than 30 percent late last night, with both trading at levels not seen in the last two months. ADA trades at $0.33 following a 16.4 percent rise in the last 24 hours, while sol is up 21 percent in the last 24 hours, trading at $16.35. ADA hasn’t traded at this level since November 19, while SOL hasn’t traded at this level since November 9.

Recall that SOL’s price declined significantly in November, dropping over 50 percent of its value following rumors of the blockchain’s relationship with Sam-Bankman-Fried, founder of the now-defunct FTX exchange. The data further shows that SOL’s price has increased by nearly 65 percent in the last week, making it the best-performing top 20 coins this year.

SOL’s price started rising following the launch of a meme-themed coin, bonk. BONK’s bullish run positively impacted SOL’s price. Before its bullish run was over, bonk was the top-performing token among the leading digital assets for the week, gaining more than 3,000 percent.

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