Markets: Bitcoin, Ether prices pull back after weekend gain on sign U.S. inflation may be easing

Bitcoin and Ether fell in Monday morning trading in Asia as the cryptocurrency market gave up some of the gains made over the weekend on the back of U.S. job numbers on Friday, which indicated inflation may be easing in the world’s biggest economy. On Saturday, Bitcoin, the world’s largest cryptocurrency, rose to a seven-week high of US$21,446.

Fast facts

• Bitcoin fell 1.7% to US$20,924 in the 24 hours to 8 a.m. in Hong Kong, while Ether lost 3.5% to US$1,570, according to data from CoinMarketCap.
• Solana was the biggest loser in CoinMarketCap’s top 10 cryptocurrencies by market capitalization, excluding stablecoins, falling 11% to US$32.72.
• Dogecoin saw the second biggest loss of 7.9% to US$0.11. The memecoin is seeing buying interest fade from Elon Musk’s US$44 billion purchase of Twitter Inc., which had led to speculation that Musk, a Dogecoin fan, would incorporate the coin into the social media platform.
• U.S. equities closed Friday higher. The Dow Jones Industrial Average and the Nasdaq Composite Index both rose 1.3%, while the S&P 500 Index closed 1.4% higher.
• U.S. nonfarm payroll jobs grew by 261,000 while the employment rate increased to 3.7% in October according to data released by the Department of Labor on Friday. Market estimates were for a 205,000 gain in jobs and an unemployment rate of 3.5%.
• Investors took the higher-than-expected unemployment rate as a prompt to buy risk assets like crypto and stocks on the sign the economy may be cooling. Higher unemployment could ease pressure on the U.S. Federal Reserve to continue with aggressive interest rate hikes to slow inflation, which is running at 40-year highs.
• Market analysts at CME Group now predict a 60% chance of a 50 basis-point hike at the Fed’s next meeting in December. The Fed has raised rates six times this year, including four hikes of 75 basis points, the latest being Nov. 2.
• U.S. interest rates are now at a 15-year high of 3.75% to 4% from near zero in March. The Fed has said it wants inflation back in a target range of 2%. It was running at 8.2% in September.