Bitcoin retreats after robust US Nonfarm Payrolls

Following the publication of the US Nonfarm Payrolls data for April, the price of bitcoin corrected in the shape of a sizable bearish engulfing candle on the five-minute price chart. After the jobs news came in hotter than anticipated, the risk asset saw a knee-jerk reaction from market players who showed caution towards Bitcoin.

The biggest asset by market capitalization, Bitcoin, had increased when the US Federal Reserve raised interest rates on May 3. The US Central Bank increased interest rates by 25 basis points, which was in line with market forecasts, but removed language from the statement indicating more tightening would be warranted, possibly denoting the end of further rate increases. The US Dollar suffered as a result, but Bitcoin, with which it has an inverse correlation, increased.

Data on nonfarm payrolls for April were hotter than anticipated. Market participants anticipated a rise in nonfarm payrolls of 179,000 in April, but the actual figure was 253,000, a departure that points to a strong labour market. The information heightened concerns about rising inflation, which caused traders to change their attitude on risky assets. The US Dollar strengthened after the report, putting further pressure on BTC.