• Bitcoin and Ether showed a quick bounce back after the release of JOLTS data. Analysts believe low job openings are positive for crypto.
• All eyes will be on the FOMC meeting later today, which would show whether or not the Fed decides to raise the interest rates.

After a sharp rejection at $30,000 levels over the last weekend, the world’s largest cryptocurrency Bitcoin (BTC) faced selling pressure moving all the way down to $27,000. However, the Bitcoin price is on its way to recovery and has gained over 2 percent in the last 24 hours. As of press time, BTC is trading at $28,616 with a market cap of $554 billion.

Along with Bitcoin (BTC), Ethereum (ETH) is also seeing an upside swing and is currently trading 1.5 percent up at a price of $1,863 with a market cap of $224 billion. One of the possible reasons behind the recovery in the BTC and ETH prices is the Job Openings and Labor Turnover Survey (JOLTS) data, released on Tuesday, May 2.

The report shows that the number of jobs openings in the United States dropped to 9.6 million in March, below the expected 9.77 million, and also at their lowest level since April 2021. Crypto market analysts consider this weakening jobs data as a positive signal for Bitcoin and other cryptocurrencies. This is because:

1. The Fed might consider pivoting from increasing its interest rates until they feel comfortable that inflation has calmed.
2. However, increasing interest rates have been much negative for asset prices including crypto.
3. For inflation to decline, the labor market should cool down.

This suggests that in the current macro environment, bad employment data would be a good signal to the market. Of course, it’s not easy to accurately predict the reason behind the recent price pump. But the timing of Tuesday’s spike suggested the BTC responded to the jobs data.

All Eyes on the FOMC Meeting

Later today on Wednesday, May 3, the Federal Open Market Committee (FOMC) will kick-start its meeting with the US Fed expected to announce a third-consecutive 25 basis points rate hike, which could be the final one before pausing.

Also, the Fall of the First Republic Bank over the last week shows a pertinent banking crisis in the US financial system This could force the Fed to put brakes on the rate hikes faster than expected. However, the data from the CME Group shows that the Fed is likely to start cutting interest rates by the end of the year 2023.

On the other hand, Bitcoin and the broader crypto markets are showing a contrary behavior to the US equities. After the release of the JOLTS data yesterday, all top three US indices – S&P 500, Nasdaq Composite, and Dow Jones Industrial Average (DJIA) – ended in negative territory.

Since the beginning of the year, the correlation between Bitcoin and equities has been weakening. On the other hand, the transaction fees on the Bitcoin network have shot up recently to a three-year high showing strong demand for the Bitcoin network.

Crypto analyst Will Clemente added:

If transaction fees are this high in a bear market (whether from Ordinals or not) they might reach a level in the bull market that creates serious demand for L2s. Pair this with some exciting new integrations/applications, we might begin to see the lightning network truly grow.

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