The crypto market fell with stocks after the highly anticipated jobs report showed the labor market is still tight and could keep the Federal Reserve on course to raise rates aggressively.
The price of bitcoin fell 3.3% to $19,380.74, according to Coin Metrics. Ether fell 2.7% to $1,322.40.
On Friday the Labor Department reported that the U.S. economy added 263,000 jobs in September{
AMD shares continue their slide to session lows
Advanced Micro Devices fell to its lows of the session in afternoon trading, with the shares down about 12.5% around 2:30 p.m. ET. The stock had been falling on disappointing preliminary results for the third quarter and a warning that revenue could fall short of its previous $6.7 billion dollar forecast.
Shares of fellow chipmakers Intel and Nvidia were down by about 5% and 7%, respectively.
— Tanaya Macheel
Money Report
"The jobs report points to no change of tune on the horizon for the Fed, so we continue to expect firm interest rates which also adds pressure to crypto markets," said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.
Cryptocurrencies' correlation with stocks has weakened in recent weeks but remains high.
"Crypto looks to be at an important technical juncture here where it looks like it's trying to carve out a bottom, but feeling heavy," he added. "I still think it, more likely than not, breaks to the downside given rising interest rates and risk-off sentiment, but so far it's a surprising effort to hold the line."
The market has been in a good-news-is-bad-news holding pattern with the Federal Reserve laser focused on bring down inflation. While the new data shows strength in the U.S. economy, that could make the Fed more likely to continue with its aggressive rate hiking plan (whereas investors are hoping for a pause or a pivot), which puts pressure on stocks and weighs on crypto.
"Crypto has been the hardest hit by rate hike fears this year," said Callie Cox, U.S. investment analyst at eToro. "It makes sense – many crypto projects don't have cashflows, so people invest in them for what they could be, not necessarily what value they're providing right now. When rates rise, the future value of a dollar falls."
Cox also highlighted the resilience of crypto assets in the second half of the year, noting that while stocks have revisited new lows with the spike in bond yields, bitcoin and ether haven't done the same. Bitcoin has been trading in a tight range of between $18,000 and $25,000 since falling to its lows of the year in June.
"To me, that's progress in this bear market," Cox said. "Crypto prices could be telling us the rate anxiety could be at a turning point. Crypto's strength is also a good indicator of frothiness in the market. It seems like the brutal growth selloff has finally washed out all the weak hands."
"Bitcoin is also far below its highs too," she added. "But stability is a step in the right direction."