US Jobless Claims Hit 1969 Low And Shake Crypto Markets

Initial claims for state jobless benefits dropped by 22,000 to 187,000 for the week ending July 18. This marks the lowest level since September 1969 and catches the market completely off guard. Economists surveyed by Reuters expected claims to rise to 212,000 instead. The sharp decline points to a very tight labor market, which keeps pressure on the economy.

This strong employment data changes expectations for the upcoming Federal Reserve meeting. The CME FedWatch tool now puts the odds of an interest rate hike at 33.7 percent, jumping up from just 11.8 percent a week ago. Higher interest rates make cash and bonds more attractive while raising the cost of holding non yielding assets like digital currencies. This completely reverses the rate cut optimism that pushed crypto higher earlier this month.

Traders should watch the upcoming Fed decision closely to see how monetary policy shapes up. While economists note that summer auto plant shutdowns might have skewed the numbers downward, the hawkish shift in market sentiment is real. A surprise rate hike or a hawkish tone from the Fed will test whether crypto assets can hold their recent gains over the coming days.