Bitcoin, XRP, Ethereum Fall Again. Why Jobs Data Hit Hopes of a Crypto Rebound.

Bitcoin is more than 30% off its record high of above $126,000 reached in early October. (AFP via Getty Images)

Key Points

• Bitcoin, Ethereum, and XRP faced pressure as economic data did not support a cryptocurrency rebound.
• Bitcoin traded at $87,800, up 1.5% over 24 hours, but down more than 30% from its October record high.
• The market sees a 24% chance of a quarter-point Federal Reserve rate reduction in January, down from 27%.

Bitcoin, Ethereum and XRP were under pressure Tuesday after key economic data failed to support digital assets on what may be a make-or-break day for hopes of a cryptocurrency rebound to end the year.

Cryptocurrencies tumbled Monday and Bitcoin fell to around $86,000 as risk sentiment across markets soured, with tech stocks leading the way lower. Investors were hoping that employment reports for October and November would be the catalyst for a crypto comeback.

Bitcoin gained ground to around $87,400 heading into the data release but slipped below $87,000 after the reports were published. The November report showed stronger-than-expected hiring but higher-than-expected unemployment.

It didn’t really move the dial on Federal Reserve interest-rate expectations. The market currently sees just a 24% chance of a quarter-point reduction in January, according to CME’s FedWatch tool, down from 27% earlier in the day.

Lower rates typically support cryptocurrencies, making them more attractive relative to lower-yielding assets. Last week’s rate cut didn’t help at all but that may be because of fears the Fed may pause its cuts.

The world’s largest cryptocurrency was trading at $87,800 later on Tuesday, up 1.5% over the past 24 hours, according to CoinDesk data. It’s off more than 30% from its record high of nearly $127,000 reached in early October.

Other cryptos also recovered. Ethereum rose 0.7% to $2,957 and popular altcoin XRP was up 1.9% at around $1.93.

Write to Callum Keown at callum.keown@dowjones.com