Bitcoin experienced a sudden crash last night, with the price dropping by 2.05% following a slight pullback of 0.48% on Thursday. This caused a major pullback in the entire crypto market, with top altcoins like Ethereum and Solana also experiencing declines. The meme coin sector, which had been performing well, saw significant drops in prices.
The overnight bearish trend in the market resulted in $360 million in long liquidations. Despite this, U.S. Bitcoin ETFs continued to see positive inflows, with IBIT leading the way with $168 million. However, there has been a decline in inflows after a record daily inflow of $886 million on Tuesday.
The drop in Bitcoin price was influenced by the U.S. May Jobs report, which revealed the addition of 272,000 jobs last month. This exceeded expectations and led to an increase in the unemployment rate to 4%, reaching levels not seen since January 2022.
The rising unemployment rate in the U.S. prompted profit bookings in the crypto market, as investors anticipated that the Federal Reserve would not cut interest rates in the near future. A rate cut could potentially boost demand, lower borrowing costs, and increase liquidity in the market, driving prices higher.
Following the crash, Bitcoin traded at around $69,343, with a Doji candle forming as it tried to find support. The 1D chart showed the crypto price attempting to hold at the 23.60% Fibonacci level, but a bearish engulfing candle formed the previous night. Despite this, the 50-day EMA could provide support, and the daily RSI remained above the halfway line.
Overall, the pullback in the market was likely a reaction to the employment data, and there is potential for a recovery in the crypto price to reach $71,000 before the upcoming FOMC meeting on June 12. The recent hawkish data suggests the possibility of a sharp move in Bitcoin on the day of the meeting.