Investing.com – and has been under intense pressure since Friday’s U.S. labor market data, which exceeded expectations and dampened hopes for a Federal Reserve rate cut in September.

Meanwhile, according to Singaporean trading firm QCP Capital, the drop in prices following the US jobs report creates a good buying opportunity.

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Friday’s nonfarm payrolls data showed the U.S. economy added 272,000 jobs in May, well above the estimate of 182,000 jobs and well above the downwardly revised reading of 165,000 jobs in April. While the unemployment rate rose to 4%, average hourly wages rose 0.4% month over month, above expectations of 0.3%.

Markets immediately lowered the likelihood of a 25-basis-point Federal Reserve rate cut in September to 60% from 85%, leading to a decline in risky assets, including cryptocurrencies.

J.P. Morgan and Citi canceled their forecasts for a Federal Reserve rate cut in July, and some analysts have put rate hikes or further liquidity tightening back on the agenda. Bitcoin, which seemed poised to break the $72,000 barrier, fell almost 3% to $68,400. Etherum followed in Bitcoin’s footsteps.

Increased market liquidity and cryptocurrency rebound

QCP Capital said the Federal Reserve will have difficulty keeping interest rates high while other central banks lower borrowing costs.

The report said: “The nonfarm payrolls report surprised us because it was confusing enough to encourage risk aversion ahead of U.S. inflation data and this week’s Federal Reserve meeting.”

“We agree this is a good buying opportunity as markets become increasingly priced in at least one rate cut by the Federal Reserve. It will be difficult for the United States to ignore this as the rest of the world continues to cut interest rates.”

The European Central Bank and the Bank of Canada cut interest rates last week as the Group of Seven (G7) began a monetary easing cycle.

Other central banks, including the Federal Reserve, may soon join the fray by lowering interest rates, which will lead to increased market liquidity, which will unintentionally enhance demand for alternative investments such as cryptocurrencies.